CHAPTER 1
Argentina
Tomás M Araya Iván Bovio Marenco M&M Bomchil
1. Introduction
The legal system governing companies in Argentina is to be found primarily in Law 19,550 of 1972 which was widely amended by Law 22,903 of 1983 and – more recently – by Law 26,994, which renamed it the Ley General de Sociedades (General Companies Law).
In the first part of this chapter we outline the types of companies most commonly used, namely:
• the corporation (sociedad anónima) and its variant the one-member corporation (sociedad anónima unipersonal);
• the limited liability company (sociedad de responsabilidad limitada); and
• the recently introduced simplified corporation (sociedad por acciones simplificada).
2. Principal types of business associations
In addition to the most commonly used legal forms mentioned above (the corporation, the simplified corporation and the limited liability company), the General Companies Law does provide for other legal forms which are rarely used for business purposes and therefore are not described in this chapter.
2.1 Corporation
The corporation (SA) is the most commonly used legal entity in Argentina, and is the form normally adopted by all kinds of businesses.
Traditionally, at least two shareholders were needed to incorporate an SA (and any other corporate form). However, since August 2015, the general Companies Law has provided that an SA can be incorporated by one person, which can be either a corporate entity – except another one-member corporation – or an individual. The liability of the shareholders is limited to the full payment of the equity subscribed.
The SA's stock capital is divided into shares that must be denominated in pesos, the Argentine legal currency. Except for certain cases provided for by specific laws,3 there are no nationality or residence requirements; foreign individuals (whether resident in Argentina or not) or foreign companies may hold up to 100% of the stock capital.
Classes of shares are permitted and shares must grant equal rights and have the same value within each separate class. Generally, there are no restrictions on transferring shares, although it is possible to establish limitations in the by-laws.
A minimum stock capital of at least one ARS100,000 (approximately $5,700) is required to register an SA. Resolution 7/2015 enacted by the General Inspectorate of Justice (IGJ) provides that the stock capital must be appropriate for the development of the corporate purpose. At least 25% of the stock capital must be paid in at the time of incorporation, and the remaining amount within the next two years. Contributions in kind must be made in full at the time of subscription.
The SA is managed by a board of directors, and may be subject to the internal supervision of statutory auditors) or a supervisory committee if the by-laws so provide or in those cases required by the law. There is no nationality requirement, but the majority of the board members must have their domicile in Argentina.
The SA must keep the accounting books required by applicable laws and the following corporate books:
• the share registry book;
• an attendance record book for shareholders' meetings;
• board meetings minute book;
• shareholders' meetings minutes book; and
• if applicable, a supervisory committee minutes book.
The one-member corporation ('SAU') is a variant of the standard corporation, in which one shareholder holds all the shares representing 100% of the stock capital. The General Companies Law requires that an SAU s stock capital must be fully subscribed and paid up upon incorporation and that the corporate name must include the expression "sociedad anónima unipersonal" or its abbreviation 'SAU'. Furthermore, the law prohibits one SAU from being the sole shareholder of another SAU.
SAUs are subject to permanent state control and must appoint a statutory auditor.
Whenever a corporation or a limited liability company ends up with only one member, it should, within a period of three months:
• incorporate a new member;
• transform into an SAU, which would require the modification of its by-laws and the addition, in its corporate name, of the expression "sociedad anómina unipersonal" or the abbreviation 'SAU'; or
• approve its dissolution and liquidation.
2.2 Limited liability company
The limited liability company ('SRL') is the second most commonly used corporate legal structure in Argentina.
A minimum of two and a maximum of 50 partners (either individuals or corporate entities) are required for the setting up an SRL. No nationality or residency requirements apply. The liability of the partners is limited to the full payment of the equity subscribed.
The corporate capital of an SRL is divided in 'quotas'. Unlike the position with an SA, in an SRL there is no minimum capital requirement. The corporate capital must be subscribed in full and 25% shall be paid in at the moment of incorporation. The remaining amount must be paid in within two years. If the quotas are paid in by means of contributions of property other than cash, then all the quotas must be paid in full at the time of incorporation.
Any transfer of quotas implies an amendment to the SRL's by-laws and must be registered with the Public Registry of Commerce in order to have effect in respect of third parties.
The management of an SRL may be undertaken by one or more managers, acting individually or jointly as specified in the articles of incorporation. There is no nationality requirement. Where there are two or more managers acting as a board, then the majority of the managers must reside in Argentina. The same rule applies where only one manager is appointed.
The appointment of a statutory auditor (or a supervisory committee) is not mandatory unless the SRL s corporate capital reaches a certain minimum figure, currently ARS10 million.
Resolutions are adopted in accordance with the provisions specified in the bylaws. Unless the by-laws provide otherwise, resolutions may be passed in writing without the need to hold a meeting.
However, in those cases when the SRL s corporate capital reaches a certain minimum figure, currently ARS10 million, a partners' meeting must be held annually in order to consider the annual financial statements.
In order to amend the by-laws, where a single partner holds a majority vote, the affirmative vote of another partner will be required.
2.3 Simplified corporation
Recently, Congress...
