The Argentine Legal Regime will have major changes as from August 1st, 2015, when the new Civil and Commercial Code of the Nation (Código Civil y Comercial de la Nación or CCCN) becomes effective.

The CCCN modifies and unifies the current Civil Code and Commercial Code of the Nation and also reforms important laws, such as the Commercial Companies Law Nº 19,550 which will be renamed as General Companies Law (Ley General de Sociedades or LGS). Among the most significant changes to be introduced by the LGS, it is found the possibility of incorporating companies with only one partner under the type of the so-called Sociedades Anónimas.

The single-shareholder company (Sociedad Anónima Unipersonal or SAU) has as its main features the following:

(i) Its social denomination must contain the expresión sociedad anónima unipersonal, its abbreviation or the acronym SAU;

(ii) The capital stock must be fully paid up upon its incorporation;

(iii) The single-shareholder company cannot be the partner of another SAU;

(iv) It will subject to permanent Government control provided in Section 299 of the LGS and must comply with the filings required by the Public Registry of Commerce of the jurisdiction where the company has been incorporated;

(v) The SAU must appoint a board of directors composed of at least three members;

(vi) It must also appoint a statutory supervisory committee composed of at least three members.

The claim to count on legal resources to limit the liability of an individual businessperson has long standing. However, the complexity derived from requiring both a board and a statutory supervisory committee with at least three members, makes SAUs unfit for small ventures. On the contrary, SAUs will make easier for multinational companies to establish a subsidiary in Argentina (these transnational companies currently have to incorporate two foreign companies in the country to become partners of a locally established one and will only need one when the new CCCN be in force). SAUs will also be helpful for local companies to reorganize their assets, separating business units with their own legal personality.

Should you need more information on the scope of this new legal vehicle, please, do not hesitate to contact us.

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Mario E. Castro Sammartino