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 or 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 por Acciones Simplificada or SAS by its Spanish acronym).
Under Article Number 33 of the LACE, the SAS will be governed specifically by LACE's provisions and supplemented by the appropriate dispositions of the General Companies Law Number 19,550 (Ley General de Sociedades Nº 19,550 or LGS).
Despite the fact that SASs have been introduced by statute with the aim of supporting entrepreneurship, the new company's 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' distinctive features are:
Incorporation and good standing
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: 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 Companies included in the cases of permanent state auditing, as provided for in Article Number 299 of the LGS2, may not either control a SAS or have a stake of more than 30 percent of a SAS' 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' partners will bear unlimited, joint and several liability (LACE, Article Number 39, final paragraph). SASs may be created by public or private deed - 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's incorporation shall be published in the Official Gazette of the jurisdiction of incorporation (LACE, Article Number 37). Provided the shareholders execute the incorporation...