What is the main source of law authorising this entity form?

Argentine Companies Act (Ley General de Sociedades N 19.550; the LGS).

Public Registry of Buenos Aires City Resolutions set forth by the IGJ (Inspección General de Justicia) as a companies’ control entity and public registry.

Tax Revenue Authority Regulations issued by ARCA (Agencia de Recaudación y Control Aduanero) – former AFIP (Administración Federal de Ingresos Públicos) as a public revenue control office.

Give a brief summary of the entity form:

Does the entity possess separate legal personality?

The SA has legal personality.

(Maximum) period of existence

There is no maximum period of existence. However, it must have a definite one.

Governing document(s)

Liability of incorporators / shareholders

Incorporators / partners enjoy limited liability up to the capital they undertook to invest in the SRL. Limited liability is subject to limited instances of piercing the corporate veil.

(Governing) bodies

The private SA is governed by its articles of incorporation and bylaws (contained in the notarial deed of incorporation, or subsequent notarial deeds of amendment).

The incorporators/shareholders are not personally liable for the debts of the company, save to the extent to which their shares are not fully paid-up.

Limited liability is subject to limited instances of piercing the corporate veil.

The SA governing body is the Shareholders’ Meeting.

The SA management body is the Board of Directors (divided into executive or non-executive directors if provided in the bylaws).

Can this type of entity be involved in international transactions and restructurings (e.g. cross border mergers, asset acquisitions and divestitures, equity acquisitions, conversions etc.)?

Yes, the SA may enter into legal national and international mergers (whereby the company ceases to exist by operation of law and its assets are acquired under universal succession of title) and divestitures/demergers of all or a portion of its assets and liabilities (with universal succession of title to the relevant assets) and conversions (changing into another form of legal entity without ceasing to exist).

Can this type of entity be publicly listed or held, or its securities be issued to members of the public?

Yes, however, it will stop being a private SA and become a public one. Public SAs are supervised by the CNV (Comision Nacional de Valores) – National Securities and Exchange Commission – and the main applicable laws are the LGS, the Ley 26,831 (Ley de Mercado de Capitales N 26,831) – Capital Markets Act – and CNV´s resolutions.

Can this type of entity be used for a non-profit or charitable organization?

Generally, no, given its nature as a commercial entity, with the ability to make profit distributions, and being subject to taxes and heavy supervision.

Give a brief summary of the process of incorporation, formation, or organization, including:

Main documents required

Notarial deed of incorporation, publication of incorporation in the Public Gazette, form of constitution and booking of the name, insurance policy for regular director, affidavits of incorporators, Form 185 (if a CUIT is requested).

Involvement of notary, company register, governmental authorities

The name of the SA must include the word “S.A.” or “Sociedad Anónima”.

Timing (estimate)

A notarial deed of incorporation must be executed before an Argentine notary. It must be executed in Spanish. The deed can be executed pursuant to a power of attorney of the incorporator(s). The SA comes into existence pursuant to the notarial deed, but it becomes regularly incorporated when registered with the incumbent Public Registry.

Timing of regular procedure: One (1) month; timing of expedited procedure: seven (7) days, subject to there being no observations of the Public Registry.

In the City of Buenos Aires, the expedited procedure for the incorporation of a SA includes the filing of AFIP Form 185 in order to request the Tax Id – CUIT – of the Company, jointly with the registration of the SA. Regarding corporate books, the registration of legal and accounting books can be requested with an additional cost of 120,000 ARS (120 USD).This alternative might not be available in other jurisdictions.

Main costs, including registration and similar fees (excluding legal fees)

The main costs are registration costs and notary fees. These costs vary depending on the jurisdiction of incorporation. As an example, in Buenos Aires City, registration costs are approximately: 450,000 ARS for the regular procedure (450 USD) and 650,000 ARS for the expedited seven (7) days procedure (650 USD).

Legal fees are approximately 1,000,000, ARS (1,000 USD).

Is a description of the anticipated business or purpose of the entity required for incorporation, formation, or organisation?

The SA’s purpose (and any subsequent amendments to it) must be stated in the articles of incorporation filed with the Public Registry. The purpose of the SA may include any activity with commercial purpose.

Minimum number of incorporators / shareholders and residency requirements

A minimum of two (2) incorporators/shareholders is required. If there are only two (2) shareholders and one (1) of them is the minority party, the IGJ requests that the minimum percentage of participation be between 2% and 5% of the capital stock. No specific residency or nationality of incorporators/shareholders is required.

Minimum number of directors (or other applicable officers) and residency requirements

A minimum of one (1) director for the private SA, and one (1) alternate director is required (if the company does not have a syndic). The majority of directors must reside in Argentina.

Minimum share capital, or equivalent, and payment requirements (including opening a bank account)

The minimum share capital required for the incorporation of a company is 30,000,000 ARS (30,000 USD). The share capital must be subscribed by 100% of the shareholders at the time of incorporation, and 25% must be paid up at such time. There is a two-year term to pay the remaining 75%. Contributions in kind of real estate, equipment or other non-monetary assets must be delivered at the time of the subscription.

The SA may only request the opening of a bank account after being registered at the applicable Public Registry of Commerce, and after requesting the tax identification number (CUIT) with the Tax Authority.

Is the physical presence of incorporators/directors/shareholders required in the jurisdiction for incorporation, formation, or organisation?

Execution of the notarial deed of incorporation may be carried out by virtue of a power of attorney.

Is a tax identification number, or equivalent, required? If so, how is it obtained?

Under the regular procedure to register the incorporation of a SA, the CUIT (Clave Única de Identificación Tributaria) – Single Identification Tax Number – is not automatically granted and cannot be requested at the same time. However, after registration the SA will have to request one from the ARCA in order to operate commercially.

Under the expedited procedure, the CUIT must be requested when filing to register the SA with the applicable Public Registry. Note that this alternative might not be available in certain jurisdictions, but it is in Buenos Aires City.

In order to obtain a CUIT, a public accountant must issue ARCA Form 185 together with 150,000 ARS (150 USD).

What is the title of the applicable company registry?

Argentina is politically divided into 24 provinces. Each province is autonomous and therefore has its own Public Registry. All private SAs must be registered with the Public Registry of the jurisdiction corresponding to its place of incorporation.

The IGJ manages the Public Registry of Buenos Aires City. Furthermore, foreign companies must register their articles of incorporation and the bylaws with the IGJ, in order to be shareholders of an SA.

What types of information must be filed at the (company) register, and which of them will it be publicly available, e.g.: Articles or other formation document, Articles or other formation document, Group structure, Share capital, Directors, Accounts, Insolvency, good-standing, liquidation, Liens and encumbrances on the shares, Liens and encumbrances on assets of the entity, Other (e.g. litigation, tax matters)

The information listed below must be filed at the Public Registry and most of it is publicly available:

• Bylaws;
• Date of incorporation;
• Name of the SA;
• Jurisdiction of incorporation;
• Address of the SA;
• Object and activities pursuant to it;
• Term of duration;
• Share capital (detail of the types of shares and the issued and paid-up shares);
• Incorporator/shareholders’ personal information (if they are persons: full name, age, civil status, nationality, address, identification number; if they are companies: number and date of register of incorporation with the incumbent Public Register of Commerce in Argentina). Only information contained in the deed of incorporation is publicly available. In case of a subsequent transfer of shares, such information may not be available because it is not required;
• Names of the members of Board of Directors and syndics or Surveillance Body and other personal information (age, civil status, nationality, address, identification number) and term;
• Procedure that must be followed in case of liquidation; and
• Date of closing of fiscal year.

What is the title of the executive body and its members? What are their main duties, tasks and responsibilities?

The Board of Directors is the managing/executive body of the SA. It represents the SA and must carry out management duties in the interests of the SA in accordance with its purpose.

It may form an Executive Commission with some of the members of the Board of Directors to carry out the ordinary course of business (if allowed by the bylaws). The Executive Commission members have responsibilities as directors.

Furthermore, the Board of Directors may appoint special or general managers (who may not be directors or shareholders) delegating to them the executive management of the SA. These managers are responsible to the SA and act on behalf of the SA with third parties to the same extent as Directors. Directors, in turn, maintain their responsibilities as such.

How are the members of the executive body appointed, dismissed and replaced?

The Board of Directors is initially appointed in the deed of incorporation and thereafter by the Shareholders’ Meeting.

Dismissal and replacement of members of the Board of Directors is also decided by the shareholders at the Shareholders’ Meeting.

Any changes in the appointments to the Board of Directors must be registered with the Public Registry.

The Board of Directors is composed of one (1) or more directors. When the SA has a share capital of ARS 2,000,000,000 (2,000,000USD) or more, it must have at least three (3) directors.

The majority of the members of the Board of Directors must be domiciled in Argentina.

The president of the Board of Directors has full powers to act on behalf of the SA.

If there is an Executive Commission, its members are appointed by the Board of Directors. The Board of Directors has to supervise the acts of the Executive Commission; and their appointment, dismissal and replacement has to be determined in the articles of incorporation and bylaws.

Is it possible to appoint corporate directors or must all directors be natural persons?

No, only natural persons can be directors.

Is there a requirement to have non-executive directors? How are they appointed, dismissed and replaced? Do non-executive directors serve on a separate body (two-tier structure) or can a one-tier board (with executive and non-executives) be appointed, or is some alternate structure used?

Yes, if there is an Executive Commission. The non-executive directors are the ones who are not members of the Executive Commission.

Since the non-executive directors are the directors who are not chosen to be part of the Executive Commission, their appointment, dismissal, and replacement is the handled in the same manner as is used for the other directors.

The Board of Directors is always a one-tier board whether it has an Executive Commission within itself or not.

What is the title of the body of owners / shareholders / members, and what are the main tasks / responsibilities / powers of that body?

The Shareholders’ Meeting is the body of shareholders. It is the governing body of the SA and, hence, approves the Board of Directors’ management and the annual fiscal statements, and makes all other governing decisions, including amending the bylaws, the appointment of directors, share issues, capital reductions, distributions, liquidation etc.

What are the majority and quorum requirements for decisions by the shareholders? Can they be varied or changed?

There are two (2) different types of meetings that Shareholders may convene and hold, depending on the issues they deal with: (i) Ordinary and (ii) Extraordinary meetings. These meetings may be held with notice, or subsequent adjournment (if there is no quorum in the first one).

The majority required in all meetings is the absolute majority of votes that may be cast by the present shareholders, unless the bylaws establish a higher number of votes.

Quorums of meetings vary depending on the type of meeting and the number of calls:

• Quorum of ordinary meeting on the first notice: Majority of shareholders that represent the majority of issued shares with the right to vote.
• Quorum of ordinary meeting reconvened on adjournment: Majority of shareholders that represent the majority of shares with the right to vote present at the meeting.
• Quorum of extraordinary meeting on the first notice: 60% of shares with right to vote, unless the bylaws establish a higher percentage.

Any special governance regimes (e.g. depending on size, being listed at a stock exchange, or other criteria)?

Yes, this is provided for SA’s under article 299 LGS. These include: (i) A private SA with share capital share of ARS 2,000,000,000 (USD 2,000,000) or more; (ii) a private SA controlled by another company subject to mandatory surveillance (see below); (iii) a private SA that is partially owned by the Argentine State; (iv) an SA operating a business with a public license; (v) operating capitalisation and saving businesses; (vi) a public SA; and (vii) a SAU.

In all the above cases, the SA’s fall under a mandatory surveillance regime:

• They must appoint a regular syndic and an alternate syndic or Surveillance Body of at least three (3) regular syndics and three (3) alternate syndics (as applicable).
• They are under permanent supervision of the incumbent Authority (the Public Registry of Commerce or CNV, as applicable).

What are the periodic accounting obligations incumbent upon the entity? To whom must those accounts be submitted?

The SA must maintain accounting records that are sufficient to determine the financial position of the company at any moment.

Within four (4) months of the end of a financial year the Board of Directors must (i) issue a summary of the financial activities, (ii) approve the annual financial statement made by a public accountant at its request, and (iii) submit them to the Shareholders’ Meeting for its approval.

Once the Shareholders’ Meeting and syndic or Surveillance Body (if applicable) adopts the annual financial statement, the former body must file them with the Public Registry.

Is the entity permitted to determine its own financial year?

Yes.

Is the entity subject to any statutory (external) auditor obligations?

Yes, the annual financial statement must be prepared by a public accountant at the request of the Board of Directors and be audited by an external auditor.

Requirements to appoint other persons (officers, secretary, internal auditor / accountants). If so, what are their functions? Are there any residency requirements?

Yes, as stated above, the Shareholders’ Meeting of private SAs under article 299 LG must appoint a Surveillance Body, except that an alternate syndic must be appointed when the share capital of the private SA is ARS 2,000,000,000 (USD 2,000,000) or more and when the company is a SAU. 

What is the title designated for 'ownership interests' (e.g. shares, quota, interests, membership)?

The share capital is divided in shares that must be registered and subscribed for in Argentinean currency.

Are different classes of ownership interests possible? If so, what are some examples of different classes?

All shares must have the same nominal value. However, they may grant different rights. The articles of incorporation may establish different classes of shares, but the shares must have the same value and grant the same kind of rights within the same class.

Common shares grant a right to one (1) vote, unless the bylaws establish different classes of common shares granting voting privileges of up to five (5) votes per share.

Preferred shares grant economic benefits but may not grant any voting rights (except for ordinary meetings of the Shareholders’ Meeting and if the SA is in arrears to pay them their economic benefits).

What documentation is required for the transfer of ownership interests?

The shareholder transferring its shares must serve a notice of said transfer upon the President of the Board of Directors.

Are there any additional formal requirements required for the transfer of ownership (notary, approvals, stamping, filings, corporate records)?

Yes, the president of the Board of Directors must give notice of the transfer to the rest of the members of the Board of Directors and record said transfer in the share register book.

Are there any applicable stamp duties imposed when transferring ownership interests?

No.

How are shares issued? (including information on payment obligations, registration requirements)

Subject to the bylaws, any share issue must be adopted by the Shareholders’ Meeting and recorded in the share register book.

In cases of new common share issues, shareholders have a right of first refusal and a right to accrue in proportion to their shares.

In addition, new shares can be issued only after the prior ones have been fully subscribed.

The capital increase of the nominal value of the share capital must be registered with the Public Registry.

Shares of private SAs must always be issued at least at nominal value. They may also be issued with a share premium.

Further information on equity contributions, e.g., non-cash payments on shares, (share premium) contributions without issuances of shares, can partially paid shares/ownership interests be permitted and what are the restrictions on them?

Shares may be paid up with non-cash goods as long as the value of the goods is certain. The value is subject to the approval of the Public Registry.

Share premium contributions may be paid for newly issued shares in addition to the nominal value.

Contributions without issuing shares are possible as loans, debentures, or irrevocable contributions convertible to shares.

Any requirements with respect to share cancellation, share repurchase and other capital reductions

Capital reductions are mandatory when the annual fiscal loss equals the value of the reserves and 50% of share capital. Otherwise, even if losses are not that high, the Shareholders´ Meeting may reduce capital to establish fiscal equilibrium or make a voluntary reduction by preparing a special balance sheet for such purpose. This procedure is subject to creditors’ opposition.

Private SA’s may only repurchase their shares (i) in order to cancel them or (ii) when it is advisable in order to avoid serious damage in which case the repurchase must be made with net profits or free reserves. In the latter case, the shares must be sold within a year, except if the Shareholder’s Meeting resolves to extend the term.

Public SA’s are subject to the regulations of CNV and are allowed to repurchase their own shares and hold them for a period of three (3) years before selling or cancelling them.

Any requirements with respect to distributions to shareholders?

The Shareholders’ Meeting must adopt decisions to make distributions in an ordinary meeting.

The Board of Directors, syndics, and Surveillance Body (if applicable) are jointly and severally responsible for dividend distributions if they are paid in advance.

SA’s that do not fall under art. 299 LGS must always distribute realised net profit.

SAs that fall under art. 299 LGS may distribute realised net profit or make early profit distributions.

Distributions of profit must be made pursuant to the bylaws. By default, they will be proportional to share ownership.

Can the owners or shareholders adopt a restrictive or governing agreement among themselves such as a Shareholders Agreement?

Yes, the provisions of such an agreement must not contradict the articles of incorporation, but additional and/or more detailed provisions are allowed.

Which are the typical annual maintenance costs of maintaining the existence and legal good standing of such an entity (excluding legal fees)?

The SA must:

• Maintain its business address;
• Appoint directors and syndics or a Surveillance Body (if applicable);
• Prepare annual accounts and adopt them in an annual general ordinary meeting;
• Notify the Public Registry in respect of the convening of annual meetings (if applicable due to art. 299 LGS);
• Make applicable tax filings; and
• Register any capital share variation or bylaws amendments, directors’ appointment, address change by reporting the same to the Public Registry.
• The costs for filings before the Public Registry range from ARS30,000 (USD30) to ARS54,000 under a regular procedure, and from ARS120,000 (USD120) to ARS222,000 (USD222) under an expedite procedure, depending on the type of filing (as outlined above).

What are the general corporate tax rates? (Specify if there is a national versus local distinction).

At the Federal Level:

• Corporate income tax: for fiscal years beginning on or after 1 January 2024 (flat rates applicable on taxable income to be indexed annually):
• Taxable income from ARS 0 to ARS 34,703,523.28: 25%.
Taxable income from more than ARS 34,703,523.28 to ARS 347,035,230.79: ARS 8,675,880.77 + 30% on the amount that exceeds ARS 34,703,523.08.
• Taxable income from more than ARS 347,035,230.79: ARS 102,375,393.08 + 35% on the amount that exceeds ARS 347,035,230.79.
• Legal entities resident in Argentina are subject to tax on Argentine and foreign-source income. Resident legal entities are able to claim any similar taxes actually paid abroad on foreign-source income as a tax credit. The tax rate applies on net income determined on a worldwide basis.
• Dividend distributions on Argentine shares and branch profit remittances are subject to 7% dividend tax withholding. No dividend tax applies on dividends paid to Argentine entities.
• Value Added Tax: The generic tax rate is 21% VAT. It is paid at each stage of the chain of production or distribution of goods or services.
• Tax on debits and credits on bank accounts: All credits and debits in bank accounts held at Argentine financial institutions, as well as certain cash payments, are subject to this tax, which is assessed at a general rate of 0.6%.
• Personal assets tax: This tax is imposed on assets existing as of 31 December each year held by:
• Resident individuals and estates (who are taxed at different tax rates depending on the computable value of the assets), which are located in Argentina and abroad; and
• Non-resident individuals and estates (taxed at a 0.5% tax rate), which are located in Argentina.
• iii. Non-residents pay this tax exclusively on their assets in Argentina. Shareholdings and/or interests in local companies owned by resident or non-resident individuals or non-resident entities are subject to this tax. The local company should pay the tax, as a substitute taxpayer in connection with the equity interests of its shareholders, at a rate of 0.5% on the net worth value per share (or quota) of the company, as reflected in the last financial statement closed prior to 31 December of the year in which the tax is assessed.

At a Provincial level:

• Gross Income Tax: Imposed on income derived from certain activities carried out within a province. The rate may vary from jurisdiction to jurisdiction depending on the taxable activity, usually ranging between 1% and 7%.
• Stamp tax: Levied by most Provinces on documents evidencing transactions for a consideration. In general, the rate applied amounts to 1% on the economic value of the agreement (or consideration to be paid under the same), except on the transfer of real estate which rate is usually higher.

At a municipal level:

• Municipal taxes are grouped in various categories and their respective taxable basis and applicable rate depend on the kind of activities carried out and the appropriate jurisdiction but, in general terms, they are not relevant in economic terms.
• Various exemptions and special rules may apply to these taxes.

Summary of any specific matters, e.g. recent or prospective major legal developments

Considering the recent change in authorities within the regulatory agencies resulting from the change in government, certain changes are expected that may not be substantial but could potentially relax oversight. Additionally, a reduction of the registration processing times is anticipated.