Amendments to the Argentine Companies Law and the Organic Law of the Public Registry of the City of Buenos Aires Incorporated in the Bill “Bases and Starting Points for the Freedom of the Argentine People”

Regarding the Argentine Companies Law (ACL) 19550, among others the Bill modifies:

 

Registry Powers, simplification, and access to information

 

• The powers of the Public Registry are limited: it will only verify the formal compliance with the requirements in the ACL, and may not demand any other requirement or condition. Likewise, when using standard models of constitutional instruments or when accompanied by a lawyer's or notary's opinion, registration must be automatic.

 

The Bill also incorporates an amendment to Law 22315, which regulates the functioning of the Public Registry of the City of Buenos Aires, to establish the process for electing the General Comptroller, who will be chosen by the Federal Executive Branch from a list of three candidates proposed by the Association of Notaries Public of the City of Buenos Aires (one candidate) and the City of Buenos Aires Bar Association (two candidates).

 

• The obligation to obtain an additional registration in the Public Registries corresponding to the location of each branch is eliminated.

 

• Public Registries in different jurisdictions have 180 days as from the publication of the law to make available the necessary means for all procedures, including the incorporation and modification of social contracts, to be carried out through freely-accessible electronic means.

 

• For greater transparency, it is established that the files of each company will be available for public and remote consultation, free of charge, and openly accessible, without needing to prove a legitimate interest.

 

Free will and equal treatment

 

• Explicit reference is made to free will regarding the determination of the incorporation documents, bylaws, their amendments, and resolutions of corporate bodies, as long as they do not contradict mandatory regulations in the ACL. In this sense, emphasis is placed, among other things, on the right of the partners to freely decide on the allocation of the benefits of the corporate activity.

 

 

• The principle of equal treatment for all shareholders will apply even when it concerns the State and when a public interest is invoked.

 

Flexibilization of associative forms and incentives

 

• Companies may include multiple business activities in their corporate purpose, a matter currently controversial with the Public Registry of the City of Buenos Aires.

 

• Sole-Members Limited Liability Companies (Sociedades de Responsabilidad Limitada Unipersonales) are included.

 

• "Stock options" are provided for, to allow employees of a company to participate in its share capital.

 

• Credits of a partner against the company are depend on the prior payment of third-party credits.

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• A new case of withdrawal (receso) without expression of cause is incorporated.

 

• A  new procedure for cancelling the shareholding of minority partners with less than 2% of the share capital and who have not carried out acts indicating their interest in the company’s activities for at least 5 consecutive years (squeeze-out) is established.

 

• The possibility of issuing bearer shares is eliminated in accordance with current legal provisions.

 

• The regime of administration and representation, and benefits of Labor-Capital Partnerships (Sociedades de Capital e Industria) is modified.

 

• Regarding the regime of Corporations (Sociedades Anónimas), the Bill introduces the following changes:

 

• • A simplified way for evidencing that the share capital is paid-in is established, which is already reflected in the regulations of the Public Registry of the City of Buenos Aires.

 

• • It is established, as a default rule, that the appointment of directors will be for an indefinite period. The bylaws may establish that the position will be for a definite or indefinite period, or delegate the determination of the term of office to the shareholders' meeting.

 

• • Sole-Shareholder Corporations (Sociedades Anónimas Unipersonales) are excluded from permanent state supervision.

 

• • All companies subject to permanent state supervision must have a supervisory committee composed of at least 3 members.

 

• As a consequence of the repeal of all special forms of companies with state participation established in the Emergency Decree 70/2023, the section referring to Corporations with Majority State Participation is entirely eliminated.