The Superintendence of Corporations of the City of Buenos Aires Re-Enacts Regulations on Foreign Companies

HD&S | 21/02/20 | Newsletters

General Resolution No. 2/2020 (the New Resolution) of the Superintendence of Corporations (IGJ), issued by its new inspector, Dr. Ricardo Nissen, recently appointed by the administration of President Alberto Fernandez, was published today in the Official Gazette. The New Resolution abrogated General Resolution No. 6/2018 (the Abrogated Resolution) issued by the former Inspector and amended the IGJ Regulations, by re-enacting informative regimes and other regulatory matters related to foreign companies back to the ones in force before the Abrogated Resolution entered into force.

The main aspects of the New Resolution are the following: (i) the former informative regime for foreign companies is re-enacted; (ii) registration of off-shore foreign companies is forbidden; (iii) foreign companies that are shareholders of Argentine companies may only attend and vote in shareholders meetings of Argentine corporations when they are registered under articles 123 or 118 of the Companies Law when the shareholders resolutions are subject to registration (e.g. appointment of directors); and (iv) foreign companies may only attend to shareholders meetings of Argentine companies through the legal representative registered before the IGJ or through an attorney-in-fact exclusively appointed by such representative (hence attorneys-in-fact appointed by the parent companies are not permitted).

Additionally, it sets out the obligation for legal representatives of foreign companies to create security (including bonds, governmental securities, local and foreign currencies, bank guarantees, surety bonds (which is, in practice, the most common method) and civil liability insurance), as required by the IGJ Regulations for directors and managers of local companies, until the expiration of the statute-of-limitation period of non-contractual liability actions calculated as from the date on which its registration as legal representative is cancelled. Legal representatives of foreign companies (both initial and its successors) shall provide evidence of the existence of the guarantee at the time of requiring their registration. Representatives already performing activities by the time the New Resolution enters into force, shall provide evidence of such guarantee with the first filing they make in compliance with the informative regime.

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