New rules on the Simplified Corporation in Argentina: the General Inspectorate of Justice adds requirements and controls

by 29 Mar 2020Companies, Corporate, Doing business in Argentina

Given the new rules on the Simplified Corporation in Argentina (Sociedad por Acciones Simplificada or SAS) issued by the General Inspectorate of Justice (the Inspección General de Justicia or IGJ), adding requirements and controls, we will mention below the modifications introduced.

General Resolution No. 9/2020, published in the Official Gazette on March 16, 2020, now requires:

1. Regarding the SHARE CAPITAL of the SAS

a) According to the law of its creation as a corporate type differentiated from the corporate types of the General Companies Law No. 19,550 (Ley General de Sociedadesor LGS), the share capital of the SAS may not be less than 2 times the minimum living and mobile salary (Law 27,349, Article 40).

However, the IGJ may now require a share capital amount higher than the legal minimum if it finds that, by the nature or characteristics of the activities included in the corporate purpose, the capital is evidently inadequate for the achievement of that purpose.

It is possible to challenge the potential IGJ’s observation by filing a business plan showing the possibility of starting up and developing the activity or at least one of the activities included in the corporate purpose during the first fiscal year of the company, either with the share capital initially subscribed under its agreed integration conditions or with new capital contributions committed to being made during such period;

b) Under no circumstances may the costs of registering with the IGJ for the incorporation of the company, or the increase in its capital, be charged to the integration of the capital;

2. In relation to the SAS MANAGERS

The IGJ will now require from the SAS´s managers a guarantee similar to that required from the directors of the corporation (Sociedad Anónima or S.A.) and managers of the limited liability company (Sociedad de Responsabilidad Limitada or S.R.L.);

3. In relation to the AUDIT of the SAS

The operation of an audit body will be optional as long as the share capital does not reach AR$ 50,000,000. Accordingly, if the partners decide to not organize an audit body, the foundational document must fully guarantee the partners’ right to information, expressly regulating direct access by digital means to the company’s digital books.

If the share capital reaches the above-mentioned figure, the SAS must amend its organizational document, regulating an audit body, which may be a single-member body – with an active auditor and a substitute auditor – and with duties and powers that are not less than those of the statutory auditors in corporations. As an alternative, the SAS may also organize a supervisory board with the powers that this body has in corporations.

4. In relation to the ACCOUNTING STATEMENTS of the SAS

The SAS must now file its financial statements (balance sheet, profit and loss statement and annual report) with the IGJ, by digital means, within 15 days of the meeting of its governing body that approved them.

The approval of the financial statements must be made within 4 months of the closing of the fiscal year by one of the following procedures: (i) meeting of the shareholders in person; (ii) vote of the shareholders communicated to the governing body through any procedure that guarantees its authenticity, within ten days of having been consulted simultaneously through a reliable means; or (iii) written statement in which all the shareholders express the sense of their vote;

5. Contents of the incorporating document

The IGJ will control, concerning the organizational document or its amendments:

(i) That they do not contravene the letter and/or principles arising from Article 13 of the LGS[1];

(ii). That they do not suppress, limit or hinder the right to approve and challenge the financial statements and to adopt resolutions of any kind in this respect;

(iii). That they provide for the constitution of optional reserves under the provisions of Article 70 of the LGS;

(iv) That they provide for the issuance of shares with a premium when such issuance is mandatory under General Resolution IGJ No. 7/2015;

(v) That they do not suppress or limit the exercise of the preferential subscription right or the right to increase it, without prejudice to the limited exceptions of Article 197 of the LGS and the possibility of stipulating communication requirements to the shareholders and deadlines for the exercise of the right that do not unreasonably hinder it;

(vi) That they do not suppress or limit the exercise of the right of withdrawal for the same cases contemplated for corporations by the LGS;

(vii) That they do not exclude the application of the causes for the partial resolution that arise from the LGS, without prejudice to the possibility of considering others following article 89 of the LGS;

(viii) That as regards the recess value, the reimbursement value in any other case of partial resolution and the acquisition value in the event of the exercise of a contractually stipulated right of first refusal, they should be determined under conditions that do not entail any deviation from the real value of the shareholding, including intangible or immaterial assets, and should immediately include as a minimum downpayment that of the proportional equity value of the shares;

(ix) That they regulate the right to challenge corporate resolutions;

(x) That they regulating the election of directors by cumulative vote or class of shares when appropriate by the form of organization of the management body;

(xi) That the modification and/or suppression of any of the essential rights listed in (i) through (x) may only be approved by the unanimous vote of the shareholders, computed on the total share capital and conferring the right to 1 vote to those shareholders who, in accordance with the conditions of issuance of their class of shares, do not have the same in other cases; and

(xii) That they provide for the applicability of those legal and/or regulatory provisions which, in the case of certain acts, provide for a right of opposition in favor of third parties.

6. Effectiveness

All the provisions came into force on the day of their publication in the Official Gazette, except for the obligation to submit financial statements, which will come into force on June 30, 2020.

Mario E. Castro Sammartino

For additional information on these or any other issues related to doing business in Argentina, please, sign up for our Legal Blog or contact us at any time.

Our publications exclusively express the author´s opinion and do not purport to be legal counsel on any case. Should you need it, you must consult with your trusted lawyer.

[1] Void stipulations

ARTICLE 13 – The following stipulations are null and void:

1) That any or some of the members receive all the benefits or are excluded from them, or are released from contributing to the losses;

2) That the funding partners are returned their capital contributions with a designated prize or with its fruits, or with an additional amount, whether there is a profit or not;

3) That the partner is assured of his capital contribution or any profits;

4) That all profits belong to the surviving partner(s);

5) That they allow the determination of a price for the acquisition of one partner’s share by another, which differs notably from its real value at the time of the transaction.


Mario E. Castro Sammartino


For additional information on these or any other issues related to doing business in Argentina, please, sign up for our Legal Blog or contact us at any time. Our publications exclusively express the author´s opinion and do not purport to be legal counsel on any case. Should you need it, you must consult with your trusted lawyer.​


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