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On September 2, 2016, the Executive Branch submitted to the
House of Representatives a bill which intends to regulate two main
issues: (i) on one hand, support for entrepreneurial activity and
(ii) on the other hand, the setting up of a new corporate type, the
S.A.S (the "Bill"). Currently, the Bill is under analysis
of the General Legislation, Small and Medium-Sized Enterprises, and
Budget and Estate Committees.
Below we shall make a brief overview regarding the most relevant
aspects of the creation of a new corporate structure. For an
overview of the entrepreneurial capital promotion regime please see
"Support for Entrepreneurial Activity
Bill" in this edition of Marval News.
The Bill proposes to set up a new corporate type: the S.A.S,
which shall be mainly ruled by the new law and supplemented by the
General Companies Law.
Innovatively for our country, and following the example of
certain foreign laws regarding this matter, the Bill proposes to
create a new corporate structure with the following main
features:
Several alternatives allow for incorporation: public or private
deed or are allowed as is incorporation by electronic means with an
electronic signature;
It may be incorporated by one or several individuals or legal
entities;
Broad corporate purpose is allowed with no need for the
activities to be related;
Minimum capital stock equivalent to two minimum wages;
Shareholders limit their liability to paying in the shares
subscribed by them, even though all shareholders are jointly liable
vis-a-vis third parties for full payment of all the shares;
Managers may be appointed for an indefinite period and
the administration may be individual, plural or by means of a
board;
Limitation to the transfer of shares is allowed;
Board and shareholders meetings can be held within the
jurisdiction of incorporation or abroad and also by electronic
means or other alternatives not requiring all members to be
present; and
The Bill allows the corporate books to be kept
electronically.
If the shareholders execute the incorporation documents as per
the templates to be approved by the pertinent Public Registry, the
registration must be fulfilled within a 24-hour period, counted as
from the next business day after the filing date.
This corporate structure is not allowed (i) for those companies
included within the cases of permanent surveillance of the Public
Registry, as provided in Section 299 of the General Companies Law,
except in the case that such control is set solely due to the
amount of its share capital exceeding AR$ 10,000,000, and (ii)
if any of the shareholders of the S.A.S. falls under the scope of
Section 299 of the General Companies Law and also holds 30% or more
of its share capital or controls the S.A.S. in any manner.
In order to simplify and expedite the start-up of the S.A.S.,
the Federal Tax Authorities ("AFIP") and financial
entities will implement simplified procedures.
While the new corporate structure is mainly created to fulfill
the needs of entrepreneurial capital, the law does not limit its
use for other projects, as long as the entity is not included
within any of the cases mentioned above.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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In order to remunerate the invested capital, Brazilian companies are allowed to distribute earnings to their shareholders in the form of dividends or under the concept of interest on net equity (juros sobre o capital próprio – JCP).
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