[ESTABLISHING A BUSINESS ENTITY IN ARGENTINA]
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ESTABLISHING A BUSINESS ENTITY IN ARGENTINA Types of business entities The two most common types of legal entities adopted in Argentina are the limited liability company (“Sociedad de Responsabilidad Limitada” or “SRL”) and the corporation (“Sociedad Anónima” or “SA”). In 2017, Argentina incorporated a new type of legal entity, the Simplified Company ("SAS"), which was expected to simplify procedures, corporate bodies and reduce costs for new
companies. However, several regulations have been issued by the Public Registry of Commerce of the City of Buenos Aires which have significantly reduced access to this type of entity as well as increasing the bureaucratic burden. Below you will find a comparative analysis of the most relevant characteristics and the basic differences between SRL, SA and SAS.
CORPORATION
SIMPLIFIED CORPORATION
LIMITED LIABILITY COMPANY “SOCIEDAD DE RESPONSABILIDAD LIMITADA”
Creation: A sociedad anónima (“ SA ”) must be formed through a public deed, and then be registered with the Public Registry of Commerce. The name of the company must include the words “Sociedad Anónima” or the abbreviated form “S.A.” The Public Registry of Commerce has limited the term of the SA to 30 years, which can be renewed by the shareholders. Capital: The corporate capital is divided in shares. The SA may issue classes of shares having the right to more than one vote per share. Shares must be issued in registered form. The minimum registered capital to create a SA is AR$ 100,000 (approx. US$273.6). Subscribers must pay at least 25 % of the subscribed capital amount at the time of the creation of the SA. If
Creation: A sociedad por acciones simplificada (“ SAS ”) may be formed through a public deed or through a private document. The name of the company must include the words "Simplified Company" or the abbreviated form "S.A.S.". The duration of the existence of the SAS is 20 years, which can be renewed by the shareholders.
Creation:
A
sociedad
de
responsabilidad limitada (“ SRL ”) may be formed through a public deed or through a private document, and then it must be registered with the Public Registry of Commerce. The name of the company must include the words “Sociedad de Responsabilidad Limitada” or the abbreviated form “S.R.L.” The Public Registry of Commerce has limited the term of the SRL to 30 years, which can be renewed by the shareholders. Capital: The corporate capital is divided in quotas. All quotas must have the same face value and voting rights. Quotaholders may own more than one quota. Although there is no minimum registered capital to create an SRL, the Registry usually requires approx. 30% of the minimum capital of an SA, i.e., AR$ 30,000 (approx. US$82,08). Subscribers must pay in at least 25 % of the subscribed
Capital: The corporate capital is divided in shares. The SAS may issue classes of shares having the right to more than one vote per share. Shares must be issued in registered form. The capital cannot be less than an amount equivalent to two (2) times the minimum wage (this currently amounts to approx. U$S 645.69). The capital has to be proportionate to the company’s purpose and the Registry can request a higher initial capital (the usual
ILN Corporate Group – Establishing a Business Entity Series
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