04 Ene 24 Companies Law No. 19,550: modifications provided for in the Bill

Agustín Cerolini, Matías Ferrari, Natalia Artmann y Valentina Circolone

On December 27, 2023 the Bill for Bases and Starting Points for the Freedom of Argentines (the “Bill”) was introduced to the Argentine National Congress by the Executive Power (the “PEN” for its acronym in Spanish). Chapter II of the Bill proposes substantial modifications to the Companies Law No. 19,550 (the «LGS» for its acronym in Spanish).

Below, we will detail the main proposed modifications.

First, the Bill incorporates the possibility of incorporating limited liability companies with a sole member, so the reduction of the number of partners to one will not be a cause for dissolution, transforming them into sole member companies.

Likewise, article 1 of the LGS introduces the principles applicable to companies and the possibility that the articles of association provide for any allocation for the profits, as well as the non-distribution of profits among the partners. However, to incorporate this type of provisions in an existing company, the unanimous vote of the partners is required.

On the other hand, the Bill eliminates from article 5 of the LGS the requirement of registration of the constitutive document in the Registry that corresponds to the domicile of each branch, so it will only be necessary to register it in the Registry corresponding to the registered office. Likewise, the 30-day period to complete the registration process is eliminated. Finally, the power of the Public Registries is limited, establishing that they shall only verify formal compliance with the requirements set forth by the LGS and shall not require any other condition.

In view of digitalization, the Bill incorporates article 6 bis into the LGS, which establishes the possibility of carrying out all procedures digitally through a remote procedures system. When the templates provided by the Registry are used, the registration will be automatic; otherwise, it must be accompanied by certification from a lawyer or a notary public regarding its legality.

The possibility of remote, public, free, open access consultation, without the need to prove legitimate interest of the files of each company is also incorporated.

The Bill also introduces the possibility of establishing companies with multiple purposes.

On the other hand, article 13 of the LGS provides for the determination of a price for the acquisition of a partner’s shareholding by another that deviates significantly from its real value at the time of making it effective, as long as they are shares that are intended for employees or workers of said company.

Likewise, the Bill establishes the subordination of the partner’s personal credits against the company to the prior payment of the credits of third parties and incorporates the possibility of recess without expression of cause.

Within the section corresponding to capital and industrial companies, the Bill makes modifications to articles 143 and 144 of the LGS, related to the administration and representation of said type of company. In turn, if the articles of association do not determine the part that corresponds to the industrial partner in the social benefits, it will be considered that half of them corresponds thereto.

Another modification introduced by the Bill is the possibility of proving compliance with the contribution of the share capital through the presentation of an affidavit signed by the legal representative of the company. Likewise, the forms of contribution of the different social types provided for in the LGS are established.

In another order of ideas, the issuance of bearer shares is eliminated, and shares intended for workers or employees are incorporated, in order to allow the staff of a company to participate in its share capital.

By modifying article 257, it is established that, unless otherwise stipulated in the by-laws, the appointment of directors is for an indefinite period.

Likewise, all companies under article 299 – permanent state supervision – must appoint a statutory audit committee of three members.

Finally, as a consequence of the decree 70/2023 the section related to wholly or partially state-owned companies is completely eliminated.