Registration Procedures

 SYNOPSIS

A. REQUIREMENTS FOR INCORPORATION

1. Corporations 3.101
2. Limited Liability Companies 3.111
3. Branch of a Foreign Corporation 3.113
4. Foreign Corporation willing to participate in
   an Argentine Company 3.114



A. REQUIREMENTS FOR INCORPORATION

1. Corporations

3.101 To form a corporation a minimum of two founding shareholders must complete the following steps:

3.102 i) Sign a private or public deed of incorporation or follow a "public inscription procedure". This second form is rarely used and implies approving a program and inscribing same before the controlling authority; signing a suscription contract with a Bank representing suscribers, holding a founding shareholders meeting and then publication and inscription of same.

3.103 ii) Incorporation by private or public deed must comply with the following:

a) Identification of all shareholders: In the case of individuals name, age, marital status, nationality, profession and type and number of identity document must be included, corporations must include name, domicile and power of attorney or authorization of their representatives.

b) Name and domicile of the corporation: the name can be reserved previously before the Inspection of Corporations by filling a form. Regarding domicile, if within the Federal Capital, stating this and inscribing a domicile established by the Board of Directors is sufficient and avoids modifying the bylaws with every change of address.

c) Indication of the object of the corporation: Even though the object can include different activities it must be precise and determined. e.g. a company can include in its object specific industrial activities plus commercial and financial activities related to same.

d) Capital must be stated in Argentine currency and each shareholders capital contribution including type of shares, classes, voting rights and rules for capital increases.

e) Duration: The corporation must have a pre-determined duration. The most common clause is 99 years from the date of inscription.

f) Organization of management: Syndics control if needed and rules for shareholders meetings.

g) Rules for distribution of profits and losses.

h) Provisions establishing shareholder rights and obligations to each other and third parties if needed.

i) Rules regarding functioning, dissolution and liquidation of the corporation.

Points b) through i) must be included in the by-laws and the deed must also include suscription of capital, amounts and ways of integration (integration in no case can exceed two years) and the election of all members and syndics establishing duration in office.

3.104 iii) The public deed or the private deed with notarization of all the signatures plus the deposit slip for 25% of the amount suscribe in cash (See Chapter 2, Point 5, 2334) and justification of capital paid in in-kind must be presented before the government controlling authority (in the case of the Federal Capital, the General Inspection of Justice, IGJ).

3.105 iv) Presentation must be accompanied by publication of a summary of the bylaws in the Official Gazette (Boletín Oficial).

3.106 v) The acceptance of denomination by part of directors and syndics.

3.107 vi) Prequalification: A prequalification form signed by a lawyer or public notary in which they certify that the documents filed comply with the corporate legislation regarding corporations.

3.108 vii) Payment of the incorporation fee.

3.109 The incorporation process can take around three weeks for a corporation. During its existence, a corporation must pay an annual registration fee to the IGJ. The amount of the fee depends on the amount of the corporation’s capital, actually the maximum fee is $ 800.- per year.

3.110 When within the name of a company the expression of Argentina or others that may express economic or juridic dependence from a foreign entity one must:

a) prove the effective existence of the foreign company.

b) credit the express approval of this company for the use of the name.

2. Limited Liability Companies

3.111 The same requirements need to be met to form a Limited Liability Company. The principal differences are the inexistence of a minimum capital requirement and no payment of an incorporation or annual fee is required. These pay a minimum fee each time a presentation is filled.

3.112 One must specially take into account that a corporation that has its capital divided in shares cannot be a partner of a company that does not comply with this requirement. This means that an Argentine corporation cannot be part of a Limited Liability Company; an exception to this principle is the case of a foreign corporation regarding which this limitation would not apply if the legislation in the country of incorporation does not establish a similar restriction.

3.113 In order to incorporate a Branch of a foreign company said branch must be registered with the Commercial Register. To such ends the following documents must be filed: (a) copy of the Bylaws and Articles of Incorporation of the foreign company; (b) evidence, issued by the pertinent foreign authorities, that the company has been established and that it is validly existing under the laws of the country where the foreign company has been incorporated; (c) copy of the minutes of the meeting of the Board of Directors or other appropriate body or authorized person, approving the following: (i) to establish a Branch in Argentina in accordance with Section 118, Law Nbr. 19,550; (ii) to register the Branch of the foreign company with the Commercial Register; (iii) to establish a legal domicile of the Branch of the foreign company in Argentina; (iv) to appoint a representative to act on behalf of the Branch and to grant him a power of attorney; and (v) to grant a special power of attorney in order to file the petition for registration; and (d) a list of the members of the Board or principal executives of the foreign company. All this documentation must be signed, notarized and then legalized by the Argentine Consulate. The legalization by the Argentine Consulate can be replaced by the "Apostille" (in accordance with the Haye Convention of October 6th, 1961). This form of business is normally used by foreign companies in their first stages of investment in Argentina, later they normally establish a local subsidiary. As far as tax purposes are concerned there are no major differences between a Branch, a Limited Liability Company or a Corporation.

2.114 According to Section 123 of the Commercial Companies Law (Law Nbr. 19.550) any foreign company that is willing to participate in any Argentine company or to form a company in Argentina must register with the Commercial Register for that specific purpose. To such ends, the following documents mist be filed: (a) copy of the Bylaws and Articles of Incorporation of the foreign company; (b) evidence, issued by the pertinent foreign authorities, that the company has been established and it is validly existing under the laws of the country where the foreign company has been incorporated; (c) copy of the minutes of the meeting of the Board of Directors or other appropriate body or authorized person approving the following: (i) to participate in and/or incorporate Argentine Companies, in accordance with Section 123, Law Nbr. 19,550; (ii) to register the foreign company with the Commercial Register; (iii) to establish legal domicile for the foreign company in Argentina; (iv) to appoint a representative to act on behalf of the foreign company and to confer upon him a power of attorney; and (v) to grant a special power of attorney to file the petition for registration; and (d) a list of the members of the Board or principal executives of the foreign company. All this documentation must be signed, notarized and then legalized at the nearest Argentine Consulate. The legalization by the Argentine Consulate can be replaced by the "Apostille" (in accordance with the Haye Convention of October 6th, 1961).