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

Argentine Companies Act (Ley General de Sociedades N 19.5550; 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 the 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 SAU has legal personality.

(Maximum) period of existence

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

Governing document(s)

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

Liability of incorporators / shareholders

The incorporator/shareholder is not personally liable for the debts of the company.

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

(Governing) bodies

The SAU governing body is the Shareholders’ Meeting.

The SAU management body is the Board of Directors.

The SAU must have a regular syndic and an alternate syndic or a Surveillance Body.

The SAU may have holdings only in share companies and in limited liability companies.

Other particularities

The SAU is a type of SA which has only one (1) shareholder. Hence, most of the rules applying to SA’s apply to SAU’s by default.

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 SAU 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?

No, in order to do so it must first convert into an SA.

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. However, in circumstances in which the incorporator/shareholder wants to maintain full control of the entity and recover the capital contribution in case of liquidation, it is a viable alternative.

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

Main documents required

Main documents: Notarial deed of incorporation, publication of incorporation in the Public Gazette, form of incorporation and booking of the name, insurance policy for regular director/s, affidavits of incorporator, AFIP Form 185 (if a Single Identification Tax Number or Clave Única de Identificación Tributaria (CUIT) is requested).

Involvement of notary, company register, governmental authorities

The name of the SAU must include the word “S.A.U.” or “Sociedad Anónima Unipersonal”.

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

Timing (estimate)

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

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

Corporate Books: In the City of Buenos Aires, the registration of the legal and accounting books of the SAU can be accomplished by the expedited incorporation procedure, with an additional cost of 120,000 ARS (120 USD).

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

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 organization?

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

Minimum number of incorporators / shareholders and residency requirements

After registration, the SAU will have to request the CUIT from the AFIP in order to operate commercially.

If the SAU is registered with the IGJ in the City of Buenos Aires, the CUIT is granted as part of the incorporation procedure. This alternative might not be available in other jurisdictions.

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

A minimum of one (1) director is required and one (1) alternate director (if the company does not have a syndic). The majority of directors must have their residency 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 (30,000USD). The share capital must be subscribed and paid-up in full by the shareholder at the time of incorporation. The contributions to pay up the shares may be monetary or in kind such as real estate, equipment, or other non-monetary assets.

The SAU may only request the opening of a bank account after being registered at the Public Registry and after being registered with the AFIP (Tax Authority) in order to get its tax ID. In the City of Buenos Aires, the tax ID – CUIT – is required as part of the incorporation procedure with the IGJ.

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?

After registration, the SAU will have to request the CUIT from the AFIP in order to operate commercially.

If the SAU is registered with the IGJ in the City of Buenos Aires, the CUIT is granted as part of the incorporation procedure. This alternative might not be available in other jurisdictions.

In order to obtain a CUIT, a public accountant must issue and submit AFIP Form 185 together with 50,000 ARS (50 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 SAUs must be registered with the Public Registry of the jurisdiction corresponding to its place of incorporation.

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

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 applicable Public Registry and most of it is publicly available:

• Bylaws;
• Date of incorporation;
• Name of the SAU;
• Jurisdiction of incorporation;
• Address of the SAU;
• Object and activities of the SAU;
• Term of duration;
• Share capital (details of the type of shares);
• Incorporator/shareholder’s personal information (if they are natural persons: full name, age, civil status, nationality, address, identification number; or if they are companies: number and date of registry of their incorporation with the Public Registry in Argentina.) Only the information contained in the deed of incorporation is available. In case of a subsequent transfer of shares, such information may not be available because its registration is not required;
• Members of Board of Directors and Surveillance Body or regular syndic and alternate syndic (full name, age, civil status, nationality, address, identification number) and duration of appointment 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 SAU. It represents the SAU and must carry out management duties in the interests of the SAU in accordance with its object.

If the Board of Directors has more than one (1) member, 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) delegating to them the executive governance of the SAU. These managers are responsible before the SAU and third parties to the same extent as directors are. Directors, in turn, maintain their responsibilities as such.

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

The Board of Directors are 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 of the Board of Directors must be registered with the Public Registry.

The SAU must have at least one (1) regular director.

Directors (including the president of the Board of Directors) may be foreigners, although the majority of the members of the Board of Directors must be domiciled in Argentina. Directors do not need to be shareholders. The president, chosen from among the members of the Board of Directors, has full powers to act on behalf of the SAU.

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 have to be set forth 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 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 the shareholders. It is the governing body of the SAU and, hence, approves the Board of Directors management and the fiscal statements, and makes all other governing decisions, including amending the bylaws, the appointment of directors and syndic or Surveillance Body, 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 the Shareholders may convene and hold, depending on the issues being dealt with: (i) Ordinary and (ii) Extraordinary meetings. And there may be a first and a second call for each meeting.

The majority and quorum requirement of the Shareholders’ Meeting is always unanimity as there is only one (1) shareholder.

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

Yes.

SAUs are subject to a mandatory surveillance regime: The Shareholders’ Meeting must appoint at least one (1) regular syndic and one (1) alternate syndic.

Furthermore, the SAU is under mandatory permanent supervision of the Public Registry.

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

The SAU 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 the 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 Surveillance Body or syndic (if applicable) adopts the annual financial statement, the former body must file them with the applicable 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 Board of Directors’ request 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 must appoint a Surveillance Body or a regular syndic and an alternate syndic.

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 nominated 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. Given that the SAU is a company of only one shareholder, there is no reason or purpose to create or establish different classes of shares or different voting or economic rights.

What documentation is required for the transfer of ownership interests?

The shareholder transferring shares must serve a notice upon the President of the Board of Directors regarding said transfer. The execution of a stock purchase agreement between the shareholder and transferee shareholder is common.

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?

Yes, nevertheless, it is possible to execute an offer for the transfer and an acceptance letter mechanism which is not subject to stamp tax if the parties involved in the transaction do not sign the same document.

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.

The capital increase must be registered with the Public Registry.

Shares of a SAU must always be issued 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 assets as long as the value of the assets is certain. Their value is subject to approval of the Public Registry according to the valuation procedure regulated by such entity.

Share premium contributions may be paid as an additional price for a new issued share in respect to its 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.

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

Any requirements with respect to distributions to shareholders?

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

The Board of Directors, syndics, and Surveillance Body (as applicable) are jointly and severally responsible for anticipated distributions.

SAUs 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?

No, since there is only a shareholder, such agreements are not possible.

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

The SAU must:

• Maintain its business address;
• Appoint directors and syndics or a Surveillance Body;
• Prepare annual accounts and adopt them in an annual general ordinary meeting. The Public Registry must be notified in respect of the accounts;
• Make applicable tax filings;
• Notify the Public Registry in respect of the convening of annual meetings (if applicable due to art. 299 LGS);
• Request the registration by the applicable Public Registry of Commerce of any capital share variation or Articles of Incorporation and bylaws amendments, directors’ appointment, or address change and request authorisation from the Public Register to make early profits distributions; and
• 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 in the registration processing times is anticipated.