Amendments To Single-Shareholder Companies In Argentina: Now Also A Suitable Vehicle For Small And Medium-Sized Enterprises

Author:Mr Mario Eduardo Castro Sammartino
Profession:Castro Sammartino & Pierini

Single-shareholder companies in Argentina were first introduced by Law Nº 26,994, which amended the old Commercial Companies Law Number 19,550 - now called General Companies Law (Ley General de Sociedades or LGS) - effective as from 1 August 20151.

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 practice2. 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:

  1. Single-shareholder companies in Argentina as Sociedades Anonimas

    According to Article Number 1 of the LGS, single-shareholder companies in Argentina may only be organized under the type of Sociedad Anónima (or SA)3. The LGS denominates them as Sociedad Anónima Unipersonal (or SAU).

  2. The SAU´s corporate name

    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 Sociedad Anónima Unipersonal, its abbreviation or the Spanish acronym S.A.U.

  3. The sole partner

    SAUs may be formed by just one shareholder. Argentine citizens or foreign individuals – in both cases residing in the county or not – and any legal entity – either incorporated in Argentina or abroad - 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 Registry5.

  4. Capital stock

    SAUs´ minimum capital stock is AR$ 100,000. Under Article Number 11, Sub-article 4, of the LGS, SAUs´ capital stock – either in cash or other assets - must be fully paid up upon its incorporation. The Article 187 of the LGS reproduces said exigency6.

    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.

  5. The permanent government supervision

    According to Article 299, Sub-article 7), of the LGS, SAUs are subject to the permanent Government Supervision Regime7 and, therefore, they must comply with the filings required by the...

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