{"id":2176,"date":"2017-05-01T17:14:16","date_gmt":"2017-05-01T20:14:16","guid":{"rendered":"https:\/\/cspabogados.com.ar\/?p=2176\/"},"modified":"2026-08-19T12:54:06","modified_gmt":"2026-08-19T15:54:06","slug":"simplified-corporations-in-argentina","status":"publish","type":"post","link":"https:\/\/cspabogados.com.ar\/en\/simplified-corporations-in-argentina\/","title":{"rendered":"Simplified Corporations in Argentina: a new and streamlined legal vehicle to do business"},"content":{"rendered":"

Simplified Corporations in Argentina: a new and streamlined legal vehicle to do business<\/h1>

by Mario Eduardo Castro Sammartino<\/a><\/span> | 1 May 2017<\/span><\/p><\/div><\/div><\/div>

On April 22, 2017, it was published in the National Official Gazette Law Number 27,349 on Support for Entrepreneurial Activities (Ley de Apoyo al Capital Emprendedor\u00a0or LACE). Outstanding among its different provisions is the introduction of a new company type: the Simplified Corporation, also known as Simplified Joint Stock Company or Simplified Shares Company (Sociedad\u00a0por\u00a0Acciones Simplificada\u00a0or SAS by its Spanish acronym).
Under Article Number 33 of the LACE, the SAS will be governed specifically by LACE\u00b4s provisions and supplemented by the appropriate dispositions of the General Companies Law Number 19,550 (Ley General de Sociedades\u00a0or LGS).
Despite the fact that SASs have been introduced by statute with the aim of supporting entrepreneurship, the new company\u00b4s legal use and scope are not restricted to entrepreneurs, and due to its streamlined structure, SASs will surely be adopted by many companies of all sizes.
SAS\u00b4 distinctive features are:
1. Incorporation and good standing<\/strong>
a. A SAS may be incorporated by one or more individuals or legal entities (LACE, Article Number 34)[1]. However, certain companies are not allowed to incorporate a SAS, nor they are to become partners of an already existing SAS:
i. A single-shareholder SAS may not incorporate another single-shareholder SAS, nor may it participate in another single-shareholder SAS (LACE, Article Number 34); and
ii. Companies included in the cases of permanent state auditing, as provided for in Article Number 299 of the LGS[2], may not either control a SAS or have a stake of more than 30 percent of a SAS\u00b4 stock capital (LACE, Article Number 39, Section 2). If any of these cases takes place, the SAS shall have to be transformed into any other company type foreseen in the LGS within the following six months, the term during which the SAS\u00b4 partners will bear unlimited, joint and several liability (LACE, Article Number 39, final paragraph).
b. SASs may be created by public or private deed \u2013 in the latter case with just bank certified signatures -, as well as by digital means with digital signatures (LACE, Article Number 35). In all cases, the company must be recorded with the Public Registry of the jurisdiction of incorporation (LACE, Article Number 35, second paragraph). A one-day notice of the company\u00b4s incorporation shall be published in the Official Gazette of the jurisdiction of incorporation (LACE, Article Number 37).
Provided the shareholders execute the incorporation documents using the templates to be approved by the relevant Public Registry, the registration must be completed within a 24-hour period as from the next business day after the filing date (LACE, Article Number 38);
2. Corporate name<\/strong>
SAS\u00b4 corporate name must contain the expression simplified joint stock company (Sociedad\u00a0por\u00a0Acciones Simplificada), its abbreviation or the acronym SAS. Failing to comply with this makes the managers or legal representatives unlimitedly, jointly and severally liable for the acts carried out under those conditions (LACE, Article Number 36, Section 2).
3. Corporate purpose<\/strong>
A plural corporate purpose is allowed, with no need for the activities to be related (LACE, Article Number 36, Section 4). However and under Article 39, section 1 of Law Number 27,349 and Article 299, Sections 1, 4 and 5 of the LGS, SASs may not have the following corporate purposes:
a. Offering their equity or debt securities to the general public;
b. Engaging in capitalization or savings and loan operations, or otherwise soliciting funds or commercial papers from the public with the promise of future considerations or benefits; and
c. Operating government concessions or public utilities.
Should a SAS adopt one of the above-listed corporate purposes or performs any of such activities, the SAS shall have to be transformed into any other company type foreseen in the LGS within the following six months, term during which the SAS\u00b4 partners will bear unlimited, joint and several liability (LACE, Article Number 39, final paragraph).
4. Capital stock<\/strong>
SAS\u00b4 minimum capital stock must be equivalent to two monthly minimum salaries (LACE, Article Number 40), which currently amounts to AR$ 16,120. Should cash be paid out on consideration for the stock, only 25 percent need be paid up upfront and the balance within two years after that. When considerations for the stock are contributions in kind, the stock must be fully paid off at the time of subscription of the shares (LACE, Article Number 41).
Equity is represented by nominatives and non-endorsable shares. The company may issue share titles or hold the shares in book-entry form (LACE, Article Number 46). Different kind of shares with different rights and share premiums may be issued (LACE, Articles Number 44, 46 y 47).
Prior partner\u00b4s consent and even straight prohibition to the transfer of shares for a term no longer than ten years may be included in the by-laws (LACE, Article Number 48).
In case the company needs urgent financing, under Article Number 45 of the LACE, irrevocable capital contributions on account of future subscription of shares are allowed for a term of 24 months since their acceptance.
In the case of a capital stock increase lower than 50 percent of the recorded stock, the by-laws may authorize to execute it without any legal notice published in the Official Gazette and filing for registration of the partners\u00b4 resolution with the Public Registry (LACE, Article Number 44).
Further to the capital contributions, SAS\u00b4 partners may also agree upon the performance of accessory services (LACE, Article Number 42, third paragraph).
5. Shareholders\u00b4 liability<\/strong>
Under Article Number 34 of LACE, SAS\u00b4 shareholders limit their liability to paying off the shares they have subscribed. However, all shareholders assume a legal unlimited, joint and several liability\u00a0vis-a-vis\u00a0third parties for the effective execution of the full contributions the partners have committed themselves to (LACE, Article Number 43).
6. Corporate governance<\/strong>
The SAS\u00b4 partners are legally entitled to decide on the company\u00b4s organization structure, laying out the provisions governing the company\u00b4s bodies. The management, government and audit bodies will operate following the LACE\u00b4s provisions, the by-laws and, additionally, the Limited Liability Company\u00b4s regulations and the LGS\u00b4 general dispositions (LACE, Article Number 49).
The management and government\u00b4 s bodies may call themselves to hold deliberations, with no need of prior notice (LACE, Article Number 49, third paragraph). The management body\u00b4s resolutions will be valid as long as all members attend and the majorities foreseen in the by-laws approve the agenda. The government body\u00b4s resolutions will be valid provided that all partners attend and the agenda is unanimously passed (LACE, Article Number 49, third paragraph).
a. Management
The SAS\u00b4 managers are to be individuals, either partners or not. They may be appointed for an indefinite period (LACE, Article Number 50) and the administration may be individual, plural or by means of a collegiate body (LACE, Article Number 51). The appointment of an alternate manager is mandatory when the company lacks an audit body (LACE, Article Number 50).
Managers may be Argentine citizens or foreign individuals, and only one of them must reside in Argentina. Foreign managers must get a tax ID (Clave de Identificaci\u00f3n\u00a0or CDI), appoint a legal representative in Argentina and set a legal address in the country (LACE, Article Number 51).
b. Partners\u00b4 decision-making
The partners\u00b4 decisions may be adopted through meetings or consultation procedures agreed upon in the by-laws. Unlike any other commercial companies, SAS\u00b4 board and shareholders meetings can be held not only at the registered office but also at any other place, by any means allowing the partners and any other participants to simultaneously communicate among themselves (LACE, Article Number 53, second paragraph).
c. Audit
Auditing bodies are optional (LACE, Article Number 53, final paragraph).
7. Transformation<\/strong>
Any company incorporated under the provisions of the LGS (e.g. corporations, limited liability companies, single-shareholder companies) may be transformed into a SAS (LACE, Article Number 61).
8. Dispute resolution<\/strong>
By-laws may provide for arbitration as the dispute resolution method (LACE, Article Number 57).
9. Company\u00b4s document and bookkeeping<\/strong>
SASs shall be able to carry their corporate and accounting books by electronic means (LACE, Article Number 58). Likewise, powers of attorney will be allowed to be granted in electronic notarial records (LACE, Article Number 59).
10. Simplified start-up procedures<\/strong>
The Federal Tax Authorities (\u201cAFIP\u201d) and financial entities will implement simplified procedures to get the company\u00b4s and foreign managers\u00b4 tax IDs and to set up bank accounts\u00a0 (LACE, Article Number 60)
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.<\/p>\n

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

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[1] Under Argentine Law, the Single-Shareholder Company (Sociedad An\u00f3nima Unipersonal) and the SAS are the only legal vehicles that allow for a single partner. To read on single-shareholder companies, please, see our Legal Blog:\u00a0https:\/\/cspabogados.com.ar\/en\/amendments-to-single-shareholder-companies-in-argentina\/.
[2] According to Section 299 of the LGS, the government exercises permanent control over the following companies:
(i) Those that offer their equity or debt securities to the general public;
(ii) Those whose corporate capital is currently above AR$ 10,000,000;
(iii) State-controlled corporations and mixed ownership companies;
(iv) Those engaging in capitalization or savings and loan operations, or otherwise soliciting funds or commercial papers from the public with the promise of future considerations or benefits;
(v) Those operating government concessions or public utilities;
(vi) Any corporation that controls or is controlled by another that is comprised in one of the situations mentioned above;
(vii) Single-Shareholder Companies.<\/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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