Bolivia: Law on Social Enterprises Promulgated

(May 25, 2018) On May 1, 2018, Bolivian President Evo Morales promulgated Ley 1055 de Empresas Sociales (Law 1055 on Social Enterprises). The new Law allows workers to take over private companies they work for when the companies enter into bankruptcy and to convert them into “social companies” to stimulate production and address unemployment. (Ley 1055 de Creación de Empresas Sociales, GACETA OFICIAL DEL ESTDO PLURINACIONAL DE BOLIVIA, May 1, 2018.)

According to the president, the new Law aims to protect workers’ rights and create and maintain the job market. (Baldwin Montero, Evo Morales Promulga la Ley de Empresas Sociales y Asegura el Pago del Segundo Aguinaldo [Evo Morales Promulgates Law on Social Enterprises and Reaffirms Payment of Second Bonus], LA RAZÓN (May 1, 2018).)

Under the new Law, a social enterprise may be formed in cases of bankruptcy, liquidation, or unjustified abandonment of private sector companies. (Ley 1055, art. 2.) In these cases, workers who are still employed by the company in distress have the right to take over its operations after a petition to this effect is approved by a court. (Id. art. 5.) Workers who seek the formation of a social enterprise under the new Law must assume through an internal agreement the liabilities and risks derived from the collective management and control of the company’s assets. (Promulgarán en Bolivia la Ley de Empresas Sociales [Law on Social Enterprises Will Be Promulgated], PRENSA LATINA (May 1, 2018).)

Business sectors have called for an emergency meeting in order to coordinate an action plan against the Law, which they claim affects their constitutional private property rights, and have announced they will file a constitutional challenge to the law. (José Luis Columbia, CEPB Advierte con Medidas Legales para Demandar Respeto a la Propiedad Privada y Libertad de Empresa [CEPB Warns of Legal Measures to Demand Compliance with Private Property and Free Enterprise], LA RAZÓN (May 2, 2018).)

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