{"id":2048,"date":"2016-11-30T20:54:19","date_gmt":"2016-11-30T23:54:19","guid":{"rendered":"https:\/\/cspabogados.com.ar\/?p=2048\/"},"modified":"2026-08-19T12:53:06","modified_gmt":"2026-08-19T15:53:06","slug":"amendments-to-single-shareholder-companies-in-argentina","status":"publish","type":"post","link":"https:\/\/cspabogados.com.ar\/en\/amendments-to-single-shareholder-companies-in-argentina\/","title":{"rendered":"Amendments to single-shareholder companies in Argentina: now also a suitable vehicle for small and medium-sized enterprises"},"content":{"rendered":"

Amendments to single-shareholder companies in Argentina: now also a suitable vehicle for small and medium-sized enterprises<\/h1>

by Mario Eduardo Castro Sammartino<\/a><\/span> | 30 Nov 2016<\/span><\/p><\/div><\/div><\/div>

Single-shareholder companies in Argentina were first introduced by Law N\u00ba 26,994, which amended the old Commercial Companies Law Number 19,550 \u2013 now called General Companies Law (Ley General de Sociedades\u00a0or LGS) \u2013 effective as from 1 August 2015[1].
However and due to the excessive legal requirements concerning the minimum number of mandatory directors and statutory auditors, single-shareholder companies in Argentina had not had a good welcome in the business practice[2]. Echoing the numerous critics the regime had raised, the Federal Congress has passed Law Number 27,290, amending articles Number 255 y 284 of the LGS as from 27 November 2016. Therefore, single-shareholder companies in Argentina are currently regulated as briefly will be summarized from now on:
Single-shareholder companies in Argentina as\u00a0Sociedades Anonimas<\/strong>
According to Article Number 1 of the LGS, single-shareholder companies in Argentina may only be organized under the type of\u00a0Sociedad An\u00f3nima\u00a0(or SA)[3]. The LGS denominates them as\u00a0Sociedad An\u00f3nima Unipersonal\u00a0(or SAU).
The SAU\u00b4s corporate name<\/strong>
Under Article 164 of the LGS, the SAs name may include the name of one or more individuals and, being the case of SAUs, must contain the expression\u00a0Sociedad An\u00f3nima Unipersonal, its abbreviation or the Spanish acronym S.A.U.
The sole partner<\/strong>
SAUs may be formed by just one shareholder. Argentine citizens or foreign individuals \u2013 in both cases residing in the county or not \u2013 and any legal entity \u2013 either incorporated in Argentina or abroad \u2013 may be the sole partner of a SAU. The only restriction is that a SAU may not be incorporated by another SAU (LGS, Article Number 1)[4].
For a foreign company to be the single-shareholder of a locally incorporated SAU, it has to be previously recorded before the Public Registry[5].
Capital stock<\/strong>
SAUs\u00b4 minimum capital stock is AR$ 100,000. Under Article Number 11, Sub-article 4, of the LGS, SAUs\u00b4 capital stock \u2013 either in cash or other assets \u2013 must be fully paid up upon its incorporation. The Article 187 of the LGS reproduces said exigency[6].
In the case of a capital stock increase, Article 186, Sub-article 3), of the LGS makes it mandatory for SAUs to have it fully paid-up together with the subscription of the new shares.
The permanent government supervision<\/strong>
According to Article 299, Sub-article 7), of the LGS, SAUs are subject to the permanent Government Supervision Regime[7]and, therefore, they must comply with the filings required by the Public Registry of the jurisdiction where the company has been incorporated.
As to the companies subject to permanent government supervision, IGJ\u00b4s General Resolution Number 7\/2015 establishes the following obligations:
(i) In the case that a SA plans to pay anticipated or provisional dividends, the company must report its decision to the IGJ within the following ten business days of being it passed, submitting certain documents explaining and supporting such resolution (Article 152); and
(ii) With an anticipation no less than fifteen business days before the date scheduled for the general ordinary shareholders\u00b4 meeting convened to consider the fiscal year\u00b4s financial statements, the company must inform the iGJ on the upcoming meeting, submitting a copy of the financial statements to be considered. After the meeting takes place and within the following fifteen business days, the company must also report the outcome of the shareholders\u00b4 meeting and file a new copy of the financial statements whether the previously submitted ones have been modified by the shareholders (Articles 154 and 155).
Directors and statutory auditors<\/strong>
The number of directors and statutory auditors is the outstanding feature of SAUs\u00b4 new regime and according to the new regulations:
(i) SAUs may appoint only one member of the board (LGS, Article Number 255, second paragraph); and
(ii) Even though they are under the permanent government supervision regime, SAUs may appoint statutorily just one active auditor and one alternate auditor (LGS, Article 284).
Regarding directors, it must be noticed that they may be Argentine citizens or foreigners, but the majority of the board must legally reside in Argentina (LGS, Article 256, fourth paragraph).
To conclude and about syndics, they must be lawyers or accountants and also be Argentine residents.
Conclusion<\/strong>
Save for the specific provisions summarized above, SAUs are governed by the entire general dispositions applicable to SAs (LGS, Articles 163 through 307)[8].
The regulation of SAUs under Argentine law has embodied the long-held claim in Argentine of having a legal vehicle capable of enabling individual ventures \u2013 especially small and medium size ones \u2013 with limitation of liability. The amendment of SAUs\u00b4 particular regime carried out by Law Number 27,290 has also overcome one important obstacle for using SAUs since it is not currently required the appointment of plural or collegiate managing and controlling bodies.
The SAUs regime is also good news for foreign businesspersons and companies wishing to do business in Argentina, since they will be able to set up a company or established a subsidiary with just one partner[9].<\/p>\n

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Mario E. Castro Sammartino<\/p>\n

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[1]\u00a0According to Article Number 1 of the former commercial companies\u00b4 regime, a company might be set up only by an agreement of two or more individuals and\/or legal entities. With the current LGS, a company may then be created not only by agreement but also by just the will of only one individual or legal entity.
[2]\u00a0Before the amendment, single-shareholder companies required the mandatory appointment of at least three directors and three statutory auditors, making this vehicle too burdensome and expensive for small and medium-sized ventures.
[3]\u00a0This type of legal entity is analogous to corporations or companies limited by shares in Common Law jurisdictions. To know more on the Sociedad An\u00f3nima, please, read our article\u00a0Doing business in Argentina Sociedad An\u00f3nima: Basics\u00a0on our\u00a0Legal Blog.
[4]\u00a0This provision must be construed as only comprehending locally incorporated SAUs and not foreign companies. As far as their existence and form are concerned, Foreign companies, are governed by the laws in force in the jurisdiction where they have been incorporated (LGS, Article 118). Therefore any one partner foreign company validly constituted abroad may be registered before any Argentine Public Registry and afterward incorporated as single-shareholder a SAU under Argentine law.
[5]\u00a0The Public Registry is organized locally by each Province and the Autonomous City of Buenos Aires. Within the jurisdiction of the Autonomous City of Buenos Aires, the Public Registry is run by an agency called the General Inspection of Justice (Inspecci\u00f3n General de Justicia\u00a0or IGJ). To regulate the operation of the registry, the IGJ has enacted General Resolution Number 7\/2015. On this issue, please, review our article\u00a0Doing Business in Argentina Foreign Companies Previous Registration on our\u00a0Legal Blog.
[6]\u00a0General SAs with more than one partner have a different regulation as to the capital stock contributions. When cash is paid as consideration for the stock, only 25 percent need be disbursed upon incorporation and the balance within two years (LGS, Article Number 166, Sub-article 29 and Article 187). When consideration for the stock is contributions in kind (e.g., real estate), it must be paid fully at the time of the capital subscription (LGS, Article 187, second paragraph)
[7]\u00a0SAUs are not the only companies that may be permanently controlled by the State. Such control also extends, among other cases, to companies offering their shares publicly and to companies with a capital of more than Argentine pesos 10-million.
[8]\u00a0A general outlook on establishing companies in Argentina, the different legal vehicles available in our country, registration procedures and other issues related to doing business in Argentina have been covered by our work Legal Aspects on Doing Business in Latin America. Chapter on Doing Business in Argentina. 2nd. Edition. Juris Publishing, Inc. Release 3 2014.
[9]\u00a0Previous to the LGS\u00b4s effectiveness, multinational companies pursuing to set up a subsidiary in Argentina had to register before the Public Registry of Commerce two foreign companies to afterwards have them become partners of a locally established one. With the current LGS, the registration of only one foreign company will suffice. Should you need more information on how to set up a company in Argentina, please, visit us on\u00a0https:\/\/cspabogados.com.ar\/en\/how-to-set-up-a-company-in-argentina\/<\/a>\u00a0
Mario Eduardo Castro Sammartino<\/p>\n

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For additional information on these or any other issues related to doing business in Argentina, please,\u00a0sign up<\/a>\u00a0for our Legal Blog or\u00a0contact us<\/a>\u00a0at any time.\u00a0Our publications exclusively express the\u00a0author\u00b4s opinion and do not purport to be legal counsel on any case. Should\u00a0you need it, you must consult with your trusted lawyer.\u200b<\/p>\n

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