Argentina: Minority Shareholder Rights In Argentina: The Need For Prevention And Dispute Resolutions Methods

When partnering to do business, it should always be considered the rights the Argentine General Companies Law Number 19,550 (Ley General de Sociedades Nº 19,550 or LGS for its Spanish acronym) grant to minority shareholders or partners – many of them with no minimum shareholding requirement -, such as:

  1. Partners may examine the company´s books and papers and require the reports which they consider relevant. Unless otherwise stated in the by-laws, this right may not be exercised in companies with appointed statutory auditing bodies (e.g. syndics) (LGS, Article Number 55);
  2. Being the case of companies with internal auditing bodies foreseen by the by-laws, shareholders representing not less than two percent of the capital may:

    1. Request the syndics at any time information on the subjects falling within the syndics´ competence (LGS, Article Number 294, Section 6); and
    2. Denounce to the syndics what they consider may affect the course of business. They syndics must investigate the issues, mention them in a verbal report to the shareholders meeting and make the comments and proposals which may be relevant. Further, the syndics may immediately call a shareholders meeting to resolve in this respect when the situation under investigation does not receive from the Board of Directors the treatment which they consider adequate and they judge it necessary to act with urgency (LGS, Article Number 294, Section 11);
  3. A corporation´s shareholder representing at least five percent of the stock capital (provided the by-laws not establish a lesser holding) may request the board - or the Syndic - summons a shareholders´ meetings, indicating the subjects to be dealt with. The meeting shall be called to be held within the following forty days. If the board or the syndic were to omit to convene the meeting, the affected shareholder might request it be done by the companies´ controlling authority or judicially (LGS, Article Number 236);
  4. To exercise cumulative voting rights to try to secure representation in the board of directors of a corporation, up to one-third of the positions to be elected (LGS, Article Number 263);
  5. Shareholders of a corporation may judicially challenge any shareholders´ resolution carried in infringement of the law or the articles of association or the by-laws, as long as they have not voted for the relevant decision or they have been absent from the meeting. The petition must be filed within three months of the closing of the meeting. Additionally, they may request a preventive stay of the resolution, providing serious grounds exist and no harm were to be done to third parties, posting sufficient prior guarantee to cover the damages which such a measure might cause the company (LGS, Articles Number 251 and 252);
  6. The rights of first refusal and accrual of their holdings when faced with capital increases (LGS, Article Number 194);
  7. Shareholders have the right of separation from the company when the shareholders´ meeting passes certain structural modifications, such as transformation of the company into other type and extension of its term of duration (except in companies which offer their shares to the public or quote their shares), transfer of the company´s domicile abroad, significant change of the company´s purpose, increases of capital within the competence of the extraordinary general meeting and which imply disbursement on the part of the partner, etc. (LGS, Articles Number 244 and 245);
  8. Shareholders of a corporation representing no less than five percent of the capital stock may oppose to the extinction of the board´s liability decided by the shareholders´ meeting (LGS, Article Number 275) and individually sue for compensation (LGS, Article Number 279);
  9. When the shareholders meeting must pass resolutions affecting the rights of a class of shares, the agreement or ratification of these classes is required, and is to be given at a specially convened meeting (LGS, Article Number 250);
  10. Any partner may judicially request the company´s intervention as a cautionary measure when the administrator or administrators of the company carry out acts or incur in omissions which place it in grave danger (LGS, Articles Number 113 and 114).

Further to the above-explained rights and when it is the case of public companies, the Capital Markets Law Nº 26,831 establishes additional rights granted to minority shareholders.

When conflict arises, minority partner´s rights may be abusively used to hinder or paralyze business and exert pressure to negotiate a buyout. Therefore, it is essential to devise, either in the by-laws or in private shareholders or partners´ agreements, the appropriate mechanisms or dispute resolutions methods to prevent or minimize disputes without affecting or compromising the future of the company.

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

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

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”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
Email Address
Company Name
Confirm Password
Mondaq Newsalert
Select Topics
Select Regions
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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