General Inspection of Justice Resolution (G) No. 9/2020 | Simplified Joint-Stock Company.
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Company Law Department Report | General Inspection of Justice Resolution (G) No. 9/2020. Simplified Joint-Stock Company (Sociedad por Acciones Simplificada “S.A.S.”)
Dear Sir or Madam,
General Inspection of Justice Resolution (G) 9/2020 was published in the Official Gazette on March 13th, modifying certain provisions present in General Inspection of Justice Resolution 6/2017 referring to Simplified Joint-Stock Companies (“S.A.S.” for initials in Spanish).
The resolution states that:
Capital Stock
Without modifying Act No. 27,349 on Entrepreneur Capital Support – which establishes that at the time of the constitution of the company, the capital shall not be inferior to that equivalent to twice the adjustable minimum living wage–, it grants the General Inspection of Justice the faculty to analyze whether the set capital stock adjusts to the corporate purpose of the company to be registered, in accordance to terms stated in General Resolution No. 5/2020.
In said case, the company shall be able to dispute the observation made by the General Inspection of Justice, in the manner provided for in the mentioned resolution.
The resolution further clarifies that under no circumstance shall registration or capital increase costs be charged to the capital contribution, overriding section No.25 subsection b) from General Resolution 6/2017.
Bodies
Section No. 31 from General Resolution 6/2017 is substituted, and it states that regular managers shall take out a warranty, such as is the case for directors and managers in corporations or limited liability companies.
Regarding the supervising body, section no. 30 of the herein mentioned resolution is modified, and it states that if the company prescinds of said body, the terms of the constituting act shall ensure the right to information, expressly foreseeing and regulating direct access through digital means, for the partners, to all the records placed in the corporate books, in accordance with the applicable law.
Furthermore, at least one permanent and one deputy syndic shall be mandatory whenever the company’s capital stock reaches the sum set forth in section no. 299 from the General Companies Act (currently ARS$50,000,000).
Financial Statements
Section no. 46 from General Resolution RG 6/2017 is replaced, and it now establishes that Simplified Joint-Stock Companies (“S.A.S.”) shall digitally submit before the General Inspection of Justice their financial statements, within 15 days as from the meeting from the governing body which has approved them.
By-laws
The General Inspection of Justice is granted the faculties to verify the constituting act, its reforms or, given the case, other acts subject to registration, to ensure that the following terms are being complied with.
Thus, said registrations shall:
1. Not include unfair clauses such as the ones prohibited in Section No. 13 from the General Companies Act.
2. Not eliminate, limit, or complicate the right to approve or object financial statements, and the right to previously obtain a copy of them.
3. Consider the issuance of optional reserves under that provided in section 70 of the General Companies Act.
4. Consider the issuance of premium shares, whenever mandatory according to General Resolution 7/2015.
5. Not eliminate or limit the preemptive and tag-along subscription right nor the possibility to set communication measures for partners and terms for the exercise of said rights.
6. Not limit or eliminate the right to recess for the same circumstances provided for corporations, neither exclude causes for partial resolution.
7. Regulate the right to challenge company resolutions.
8. Regulate the appointment of managers by cumulative vote or share type when it proceeds according to the administrative body’s organization form.
9. Only allow for modification and/or suppression of any of the aforementioned rights by a unanimous vote from the shareholders, considering the entirety of the capital stock, and with the right to one vote to shareholders who lack said vote under other circumstances.
10. Consider the use of legal and/or regulatory provisions which, facing certain parties shall foresee the right to apposition on the favor of third parties.
Lastly, we want to clarify that this resolution has become effective upon its date of publication in the Official Gazette, except regarding the obligation to submit financial statements before the General Inspection of Justice, which shall become effective on June 30th, 2020.
Should you require any further information on this matter, please do not hesitate to contact us.
Sincerely,
Fernanda Mierez
Miguel M. Silveyra
Miguel C. Remmer