GENERAL RESOLUTION IGJ 2/2020 – REINSTATEMENT OF DISPOSITIONS REGARDING FOREING COMPANIES
Dolores Gallo, Ximena Suárez and Juan Ignacio Posse
On February 21st, 2020 the General Resolution No. 2/2020 (the “Resolution”) passed by the Public Registry of the City of Buenos Aires (“IGJ”) was published in the Official Gazette. By this Resolution, the General Resolution No. 6/2018 is repealed, and, among others, the obligations of foreign companies related to the certification of the development of activities and existence of assets abroad are reinstated.
As from February 21st, 2020, the date of the entry into force of the Resolution, the most relevant applicable dispositions are the following:
- The companies incorporated abroad which request their registration under Sections 118 and 123 of Argentine General Companies Law (“GCL”) (the “Foreign Companies”) must prove activity and assets in the place of their incorporation or registration and identify their partners.
- The Foreign Companies must comply with the annual information regime and therefore annually prove activity and assets in the place of their incorporation or registration and identify their partners.
- Companies which are banned or restricted from carrying out their activities in the place of their incorporation or registration (“off-shore companies”) shall not be registered unless they request their registration as vehicle companies and meet the necessary requirements for such purposes.
- A ruling related to isolated acts, by means of which the IGJ is authorized -subject to certain standards- to qualify the activities of a Foreign Company as performed on a regular basis in Argentina (as per Section 118 of the GCL) or consider them subject to the ruling applicable to a local company (Section 124 GCL), is reinstated.
- Foreign Companies will only be able to be represented at shareholders’ / quotaholders’ meetings of local companies by their legal representative registered before the IGJ or an attorney-in-fact exclusively appointed by him/her.
- Likewise, the Resolution states that legal representatives of Foreign Companies must constitute a guarantee for an amount equal to five times the minimum corporate capital required for local corporations (‘sociedades anónimas’) (currently, the guarantee shall be of AR$500,000 – approximately USD 8,000).
- Must be constituted by the time of the appointment of the legal representative.
- In the case of representatives that are in the exercise of their duties by the time of the entry into force of the Resolution, upon submission of the annual informative regime.
- Must be in force until the cancellation of the registration of the legal representative plus the additional term stated by the Resolution.