New requirements for the registration of foreign companies before the Public Registry of Commerce of the City of Buenos Aires

On March 9, 2005, the “Inspección General de Justicia” (“IGJ”), a governmental agency in charge of the Public Registry of Commerce of the City of Buenos Aires, issued General Resolution No 3/2005 (“Res. 3/05”). Res. 3/05 establishes additional requirements for the registration of foreign companies according to sections 118 and 123 of the Argentine Companies Law No 19,550 (the “ACL”)(1). This resolution is in force as of March 10, 2005, the date of its publication in the Official Gazette.

I.     Publicity

Res. 3/05 requires that a publication be made in the Official Gazette in order to register foreign corporations, limited liability partnerships or other forms of legal entities unknown in Argentina according to section 118 of the ACL and for any later registration. The publication must contain the same information required by the ACL for Argentine companies with limited liability (SRL and SA). The information that must be published is the following:

a) At the time of incorporation of the company:

(i) name, age, marital status, nationality, profession, domicile and ID Number of the partners or shareholders;

(ii) date of issuance of the document of incorporation;

(iii) name of the company;

(iv) registered office of the company;

(v) purpose of the company;

(vi) duration of the company;

(vii) capital of the company;

(viii) composition of the board of management and supervision, names of their members and period of duty;

(ix) organization of the company’s legal representation;

(x) date of closure of the financial year.

b) In the event of an amendment to the company’s by-laws or in the event of the dissolution of the company:

(i) date of the resolution of the company which approved the amendment to the company’s by-laws or the dissolution of the company;

(ii) if the amendment affects the items (iii) to (x) of paragraph a), the publication will have to be made as established therein.

If the law applicable to the foreign company does not require or authorizes omitting any of the above-mentioned items, that circumstance will have to be stated in the publication. Furthermore, the omission shall be justified before the IGJ by filing the professional legal opinion with a transcription of the relevant legal regulations or by filing an explanatory writ, issued by an attorney or notary public of the foreign jurisdiction where the foreign company was incorporated with a certification of the registration of the attorney or the notary public before the relevant authority.

2.     Identification of partners and shareholders

Res. 3/05 also establishes that the foreign corporations, or other form of legal entities unknown in Argentina which allows the anonymity of the shareholders or partners, that request registration according to sections 118 and 123 of the ACL shall file a document signed by an authority or officer of the foreign company –whose signature, capacity and faculties shall be vouched for by a notary public or by the competent authority. The document shall contain the following essential minimum information of the partners or shareholders of the foreign company:

a) Shareholders or partners which are individuals:

(i) name and last name;

(ii) domicile;

(iii) ID number or passport number; and

(iv) amount of shares, votes and ratio of participation in the capital of the foreign company.

b) Shareholders or partners which are legal entities:

(i) name of the shareholder company;

(ii) domicile of the shareholder company;

(iii) information of the registration, authorization or incorporation of the shareholder company; and

(iv) amount of shares, votes and ratio of participation in the capital of the foreign company.

If the foreign company refuses or is unable to provide the IGJ with the necessary information for the identification of the company’s shareholders the foreign company will not be able to obtain its registration before the IGJ.

The documentation with the identification of the shareholders shall be filed before the IGJ, within 30 days from its issuance date and with all the other documentation to be filed for the registration of the foreign company.

Res. 3/05 distinguishes the documentation to be filed depending on the kind of shares, and for particular circumstances, as is explained below:

a) if the shares are nominative, a public deed of transcription of the company’s registry of shares/shareholders or an equivalent document shall be filed;

i) If the shares are issued to bearer, the company shall file a certificate with the information of the shareholders on whose favour the foreign company had issued shares or certificates of shares and/or who have appointed agents or representatives in order to receive their shares or certificates; in this case, the certificate shall also contain the information of all the appointments of agents or representatives that the shareholders had made;

c) the IGJ will be able to request any additional information and documentation to corroborate the shareholders’ background, whenever the foreign company is from “off shore” jurisdictions and/or jurisdictions considered as low or non taxing and/or non-collaborator against money laundry and international crime jurisdictions -according to General Resolution IGJ 2/2005 (please see “New restrictions on registration of ‘off-shore’ companies in the City of Buenos Aires” in Marval News # 36, February 28, 2005);

d) if the shares had been transferred to a trust or a similar legal figure, the documentation shall include the information of the trustee, fiduciary and/or the beneficiaries or their equivalents;

e) if the shares are part of the assets of a foundation or a similar kind of legal entity, with either public or private purposes, the information of the founder and the person or entity that made the contribution or transfer to the foundation shall be informed.

The shareholders whose shares are quoted on the stock exchange or stock market will be exempt from identification every time, except from those shareholders who are part of the internal control group of the foreign company -by legal disposition or as a matter of fact- and whose shares are not reached by the regulations for the public share offer.

In the event that the information of identification of the shareholders provided to the IGJ changed after the foreign company had been registered, the foreign company shall inform this situation and file the documentation with the information of the modifications with the IGJ at the time of compliance with the annual filing required by General Resolution IGJ 7/2003 (please see “Additional requirements to register foreign entities - Resolution No 7/2003” in Marval News # 21, September 30, 2003) or within a 30 day-term since the modification occurred if the modification implies a change in the internal control of the company established by law, according to the majorities regulations of the applicable legal system.

Res. 3/05 is not applicable to the foreign companies used exclusively as investment vehicles, to which the General Resolution IGJ 22/2004 (please see “Registration of Special Purpose Vehicles facilitated - PRC Resolution No 22/2004” in Marval News # 32, September 30, 2004) will remain to be applicable.All the documentation issued in a country other than Argentina shall be notarised and legalised by the proceedings established in “The Hague Convention” or by the Ministry of Foreign Affairs and translated to Spanish by a registered public translator, where appropriate.

Section 118 of the ACL regulates the registration of branches of foreign companies, while section 123 regulates the registration of foreign companies which request authorization to participate as shareholders or partners of Argentine companies.

(1) Section 118 of the ACL regulates the registration of branches of foreign companies, while section 123 regulates the registration of foreign companies which request authorization to participate as shareholders or partners of Argentine companies.