The question about the best legal vehicle to do business in Argentina has recently received a brand new and far better answer, raising again the issue of how broad contractual freedom in corporate law is in our country.
Corporate law in Argentina is mainly governed by the General Companies Law Nº 19,550 (Ley General de Sociedades or LGS by its Spanish acronym), being the company types most commonly used the so-called Sociedad Anónima (or S.A.) and Sociedad de Responsabilidad Limitada (or S.R.L.). The LGS is based upon public policy principles, and thus a significant number of its dispositions are mandatory, and cannot be contracted out by the parties.
However, under Law Number 27,349, published in the National Official Gazette on 22 April 2017, a new paradigm has been introduced in Argentine corporate law by creating a new company type: the simplified corporation (Sociedad por Acciones Simplificada or SAS).
Unlike the company types regulated by the LGS, the SAS is built around the principle of freedom of contract, with very few mandatory provisions, making it a very flexible, fast to incorporate, highly customizable, and cost-effective legal vehicle. In this line, SAS's main features are the following:
A SAS may be incorporated by one or more individuals or legal entities. There is no nationality, nor residence requirement to be a shareholder of a SAS;
The SAS may be created electronically by digital means, and be registered with the Public Registry and get its tax ID within 24 hours, as long as the partners choose the sample by-laws enacted by the Public Registry;
Plural corporate purposes are allowed, with very few restrictions, being the most significant one the prohibition for SAS to offer their equity or debt securities to the general public;
The SAS' minimum capital stock must be equivalent to two monthly minimum salaries;
Equity is represented by nominatives and non-endorsable shares. Different kind of shares with different rights and share premiums may be issued. Prior partner's 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;
Irrevocable capital contributions on account of future subscription of shares are allowed for a term of 24 months since their acceptance;
Shareholders limit their liability to just paying off the shares they have individually subscribed, and guaranteeing the paid up of the full contributions the other partners have committed themselves to;...