21 Ago 24 Procedure for the transformation of civil associations into corporations

By Agustín L. Cerolini, Natalia Artmann and Valentina Circolone

Through General Resolution 18/2024 (the «Resolution»), published in the Official Gazette on August 21, 2024, the Public Register of the city of Buenos Aires («IGJ» for its acronym in Spanish) establishes the procedure for the transformation of civil associations into corporations, as well as the participation of these entities in corporations.

It should be noted that this Resolution is issued by virtue of article 345 of General Resolution 15/2024, which provides that civil associations and foundations may transform, merge, or split in accordance with article 162 of the Civil and Commercial Code, applying IGJ’s rules on transformation.

The most important points of the Resolution are highlighted below:

Transformation of civil associations into corporations

Article 345 bis is incorporated into Annex A of General Resolution IGJ No. 15/2024, which sets forth the requirements for the registration of the transformation of a civil association into a corporation not included in article 3 of the General Companies Law No. 19,550, clarifying that the transcription of the minutes of the extraordinary meeting of members where the transformation into a corporation is approved by a majority of no less than two-thirds (2/3) of the members participating in such meeting will be necessary.

For these purposes, the submission of the copy of the public deed of the transformation agreement, the special transformation balance sheet, the accounting opinion, among other documents, is required to formalize the registration.

Participation in corporations

It is stated that civil associations and foundations may participate as shareholders in corporations, including single-shareholder corporations, either through the acquisition of shares for free or for consideration, or through the incorporation of new corporations.

For this participation, approval by the members’ meeting or the board of directors with a qualified majority of two-thirds is required.

Submission of financial statements

Article 354 bis is incorporated, imposing the obligation, when submitting the financial statements corresponding to the fiscal year in which the shares were acquired for consideration in already incorporated corporations or in which the civil associations or foundations participated in the incorporation of a corporation, to submit a copy of the minutes in which the decision to approve the participation was resolved, with the decision being made by a majority of no less than two-thirds (2/3) of the members who participated.

Application

The Resolution will come into force on November 1, 2024. However, it allows civil associations that transform or participate as shareholders in corporations from the publication of the resolution to request the application of the more beneficial provisions of this Resolution.