Argentina: Simplified Corporations In Argentina: A New And Streamlined Legal Vehicle To Do Business

Last Updated: 3 May 2017
Article by Mario Eduardo Castro Sammartino
Most Read Contributor in Argentina, November 2017

On April 22, 2017, it was published in the National Official Gazette Law Number 27,349 on Support for Entrepreneurial Activities (Ley de Apoyo al Capital Emprendedor or LACE). Outstanding among its different provisions is the introduction of a new company type: the Simplified Corporation, also known as Simplified Joint Stock Company or Simplified Shares Company (Sociedad por Acciones Simplificada or SAS by its Spanish acronym).

Under Article Number 33 of the LACE, the SAS will be governed specifically by LACE´s provisions and supplemented by the appropriate dispositions of the General Companies Law Number 19,550 (Ley General de Sociedades Nº 19,550 or LGS).

Despite the fact that SASs have been introduced by statute with the aim of supporting entrepreneurship, the new company´s legal use and scope are not restricted to entrepreneurs, and due to its streamlined structure, SASs will surely be adopted by many companies of all sizes.

SAS´ distinctive features are:

1. Incorporation and good standing

  1. A SAS may be incorporated by one or more individuals or legal entities (LACE, Article Number 34)1. However, certain companies are not allowed to incorporate a SAS, nor they are to become partners of an already existing SAS:

    1. A single-shareholder SAS may not incorporate another single-shareholder SAS, nor may it participate in another single-shareholder SAS (LACE, Article Number 34); and
    2. Companies included in the cases of permanent state auditing, as provided for in Article Number 299 of the LGS2, may not either control a SAS or have a stake of more than 30 percent of a SAS´ stock capital (LACE, Article Number 39, Section 2). If any of these cases takes place, the SAS shall have to be transformed into any other company type foreseen in the LGS within the following six months, the term during which the SAS´ partners will bear unlimited, joint and several liability (LACE, Article Number 39, final paragraph).
  2. SASs may be created by public or private deed – in the latter case with just bank certified signatures -, as well as by digital means with digital signatures (LACE, Article Number 35). In all cases, the company must be recorded with the Public Registry of the jurisdiction of incorporation (LACE, Article Number 35, second paragraph). A one-day notice of the company´s incorporation shall be published in the Official Gazette of the jurisdiction of incorporation (LACE, Article Number 37).

Provided the shareholders execute the incorporation documents using the templates to be approved by the relevant Public Registry, the registration must be completed within a 24-hour period as from the next business day after the filing date (LACE, Article Number 38);

2. Corporate name

SAS´ corporate name must contain the expression simplified joint stock company (Sociedad por Acciones Simplificada), its abbreviation or the acronym SAS. Failing to comply with this makes the managers or legal representatives unlimitedly, jointly and severally liable for the acts carried out under those conditions (LACE, Article Number 36, Section 2).

3. Corporate purpose

A plural corporate purpose is allowed, with no need for the activities to be related (LACE, Article Number 36, Section 4). However and under Article 39, section 1 of Law Number 27,349 and Article 299, Sections 1, 4 and 5 of the LGS, SASs may not have the following corporate purposes:

  1. Offering their equity or debt securities to the general public;
  2. Engaging in capitalization or savings and loan operations, or otherwise soliciting funds or commercial papers from the public with the promise of future considerations or benefits; and
  3. Operating government concessions or public utilities.

Should a SAS adopt one of the above-listed corporate purposes or performs any of such activities, the SAS shall have to be transformed into any other company type foreseen in the LGS within the following six months, term during which the SAS´ partners will bear unlimited, joint and several liability (LACE, Article Number 39, final paragraph).

4. Capital stock

SAS´ minimum capital stock must be equivalent to two monthly minimum salaries (LACE, Article Number 40), which currently amounts to AR$ 16,120. Should cash be paid out on consideration for the stock, only 25 percent need be paid up upfront and the balance within two years after that. When considerations for the stock are contributions in kind, the stock must be fully paid off at the time of subscription of the shares (LACE, Article Number 41).

Equity is represented by nominatives and non-endorsable shares. The company may issue share titles or hold the shares in book-entry form (LACE, Article Number 46). Different kind of shares with different rights and share premiums may be issued (LACE, Articles Number 44, 46 y 47).

Prior partner´s consent and even straight prohibition to the transfer of shares for a term no longer than ten years may be included in the by-laws (LACE, Article Number 48).

In case the company needs urgent financing, under Article Number 45 of the LACE, irrevocable capital contributions on account of future subscription of shares are allowed for a term of 24 months since their acceptance.

In the case of a capital stock increase lower than 50 percent of the recorded stock, the by-laws may authorize to execute it without any legal notice published in the Official Gazette and filing for registration of the partners´ resolution with the Public Registry (LACE, Article Number 44).

Further to the capital contributions, SAS´ partners may also agree upon the performance of accessory services (LACE, Article Number 42, third paragraph).

5. Shareholders´ liability

Under Article Number 34 of LACE, SAS´ shareholders limit their liability to paying off the shares they have subscribed. However, all shareholders assume a legal unlimited, joint and several liability vis-a-vis third parties for the effective execution of the full contributions the partners have committed themselves to (LACE, Article Number 43).

6. Corporate governance

The SAS´ partners are legally entitled to decide on the company´s organization structure, laying out the provisions governing the company´s bodies. The management, government and audit bodies will operate following the LACE´s provisions, the by-laws and, additionally, the Limited Liability Company´s regulations and the LGS´ general dispositions (LACE, Article Number 49).

The management and government´ s bodies may call themselves to hold deliberations, with no need of prior notice (LACE, Article Number 49, third paragraph). The management body´s resolutions will be valid as long as all members attend and the majorities foreseen in the by-laws approve the agenda. The government body´s resolutions will be valid provided that all partners attend and the agenda is unanimously passed (LACE, Article Number 49, third paragraph).

a. Management

The SAS´ managers are to be individuals, either partners or not. They may be appointed for an indefinite period (LACE, Article Number 50) and the administration may be individual, plural or by means of a collegiate body (LACE, Article Number 51). The appointment of an alternate manager is mandatory when the company lacks an audit body (LACE, Article Number 50).

Managers may be Argentine citizens or foreign individuals, and only one of them must reside in Argentina. Foreign managers must get a tax ID (Clave de Identificación or CDI), appoint a legal representative in Argentina and set a legal address in the country (LACE, Article Number 51).

b. Partners´ decision-making

The partners´ decisions may be adopted through meetings or consultation procedures agreed upon in the by-laws. Unlike any other commercial companies, SAS´ board and shareholders meetings can be held not only at the registered office but also at any other place, by any means allowing the partners and any other participants to simultaneously communicate among themselves (LACE, Article Number 53, second paragraph).

c. Audit

Auditing bodies are optional (LACE, Article Number 53, final paragraph).

7. Transformation

Any company incorporated under the provisions of the LGS (e.g. corporations, limited liability companies, single-shareholder companies) may be transformed into a SAS (LACE, Article Number 61).

8. Dispute resolution

By-laws may provide for arbitration as the dispute resolution method (LACE, Article Number 57).

9. Company´s document and bookkeeping

SASs shall be able to carry their corporate and accounting books by electronic means (LACE, Article Number 58). Likewise, powers of attorney will be allowed to be granted in electronic notarial records (LACE, Article Number 59).

10. Simplified start-up procedures

The Federal Tax Authorities ("AFIP") and financial entities will implement simplified procedures to get the company´s and foreign managers´ tax IDs and to set up bank accounts (LACE, Article Number 60)

Footnotes

1. Under Argentine Law, the Single-Shareholder Company (Sociedad Anónima Unipersonal) and the SAS are the only legal vehicles that allow for a single partner. To read on single-shareholder companies, please, see our Legal Blog: http://cspabogados.com.ar/en/amendments-to-single-shareholder-companies-in-argentina/.

2. According to Section 299 of the LGS, the government exercises permanent control over the following companies:

(i) Those that offer their equity or debt securities to the general public;

(ii) Those whose corporate capital is currently above AR$ 10,000,000;

(iii) State-controlled corporations and mixed ownership companies;

(iv) Those engaging in capitalization or savings and loan operations, or otherwise soliciting funds or commercial papers from the public with the promise of future considerations or benefits;

(v) Those operating government concessions or public utilities;

(vi) Any corporation that controls or is controlled by another that is comprised in one of the situations mentioned above;

(vii) Single-Shareholder Companies.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Mario Eduardo Castro Sammartino
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

    Disclaimer

    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

    Registration

    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

    Cookies

    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions