Branch of a foreign company

Although it shall be registered at the Inspección General de Justicia, it is a decentralization of the company's head office, with no legal entity of its own, ruled by the laws of the country of origin of its head office, whichis responsible for the branch´s operations.

Said company does not require either its own capital, or shareholder´s or board’s meetings, or records of minutes whatsoever. It must have its accountability separated from the head office´s and must file annual financial statements with the Inspección General de Justicia.

The branch must be managed by a legal representative, who must be a natural person.

>Registration requirements:

  • Form “Inscripción de sociedad constituida en el extranjero para el ejercicio de la actividad habitual. (Art. 118 LSC)” (View form) duly stamped.
  • A prequalification report issued by a local notary public or lawyer.
  • The following documentation from the head office, duly legalized, apostilled translated: (i) articles of incorporation, (ii) certificate of good standing, (iii) government´s body resolution regarding the branch´s creation, stating an address in CABA, its fiscal year end and its representative´s designation, and (iv) proof of the fact that the head office´s main activity and assets are located outside Argentina.
  • Identification of its shareholders or partners.
  • Publications in the Official Gazette.
  • A document signed by the representative and certified by a Notary Public where he accepts his appointment and provides his personal information, including his national tax ID number.
  • Politically Exposed Person´s sworn affidavit.
  • Payment of the registration fee at the Inspección General de Justicia.

Foreign shareholder or partner of a local entity

>Registration requirements:

  • Form “Inscripción de entidad extranjera para constituir o participar en sociedad local (Art. 123 LSC)” (View form) duly stamped.
  • A prequalification report issued by a local notary public or lawyer.
  • The following documentation from the head office, duly legalized, apostilled and translated: (i) articles of incorporation, (ii) certificate of good standing, (iii) government´s body resolution regarding the company's registration in Argentina, stating an address in CABA, its fiscal year closing date and its representative´s designation, and (iv) proof of the fact that the head office´s main activity and assets are located outside Argentina.
  • Identification of its shareholders or partners.
  • A document signed by the representative and certified by a Notary Public where he accepts his appointment and provides his personal information, including his national tax ID number.
  • Politically Exposed Person´s sworn affidavit.
  • Payment of the registration fee at the Inspección General de Justicia.

In order to own shares or quotas of an Argentinean entity, a foreign company must be firstly registered with the Inspección General de Justicia in that sense.

The company locally registered is a separate entity from its head office, with its own rights and obligations, its own capital and its own government and administrative bodies. Therefore, the head office is not responsible for its operations. The branch shall be responsible before third parties with its own assets.

Creation of a local company

>Steps:

  1. Drafting and signing the company's bylaws - Must include: (i) identification of the shareholders or partners; (ii) name and domicile; (iii) purpose; (iv) capital, identifying each partner's contribution; (v) terms; (vi) provisions regarding management, auditors and shareholders´ meetings; (vii) provisions regarding profits and losses; (viii) partner's rights and obligations; and (ix) provisions regarding company's performance, dissolution or liquidation. Depending on the type of entity chosen, bylaws shall be signed in a public document (SA or SAU) or in a private one with notarized signatures (SRL).
  2. Depositing the initial capital - SAU´s capital must be fully subscribed and paid up upon its incorporation. Remaining entities may only deposit firstly at least 25% of their capital, filling in the remanent within 2 years. Those amounts must be deposited Banco de la Nación Argentina, being required the corresponding deposit receipt or a notary public´s withstanding.
  3. Publishing a notice in the Official Gazette of the Republic of Argentina with the following information: (i) identification of the shareholders or partners; (ii) date of the bylaws; (iii) name; (iv) domicile; (v) purpose; (vi) term; (vii) capital; (viii) managers and auditors; (ix) representative; and (x) fiscal year closing date. In order to publish the notice, in case it is the legal representative who does it, he shall submit a Note to the Official Gazette.
  4. Filling the registration request with the Inspección General de Justicia: (i) form duly stamped; (ii) prequalification report; (iii) bylaws and registered office; (iv) notice signed by the managers and the auditors accepting their designation and a guarrantee in favour of the regular directors; (v) notices published in the Official Gazette; (vi) proof of the capital's deposit; (vii) politically Exposed Person´s sworn affidavit by directors or auditors; and (viii) payment of the registration fee.

Acquisition of stock ownership in an existing local company

>Steps:

  1. Signature of a letter of intent or memorandum of understanding and of confidentiality agreements.
  2. Due Diligence of the target company.
  3. Signature of the purchase agreement and submittance of the corresponding shares certificates.
  4. If the target company is a Corporation: (a) the board of directors must be notified of the shares´ transfer; (b) the shares´ transfer must be registred in the Register of Shareholders Book; and (c) if there is a change in the management body, a Shareholders Meeting shall be held in that respect respect to accept resignations and make appointments. then, newly appointed authorities must be registered with IGJ. The new President must link his own tax ID number with the company´s ID.
  5. If the company is a Limited Liability Company, the transfer of the quotas and the managements changes, if applicable, have to be registered with the Inspección General de Justicia. The new President must link his own tax ID number with the company´s ID at the AFIP.

Acquisition of a goodwill

It's a procedure that implies the purchase of all the assets of the vendor's business, including not only its facilities, equipment, furniture and tools, but also the business´ name, the lease agreements and the customers. It differs from the acquisition of ownership interests on the fact that by acquiring a goodwill and following its procedure, the buyer is not responsible for hidden liabilities, not being needed any contractual provision in that sense.

>Steps:

  1. Signature of a bill and the vendor should provide the buyer with a detailed and signed note with of all its liabilities.
  2. Publishing a notice in the Official Gazette with a detail of the transaction and information on where and when must the vendor’s creditors must present their oppositions.
  3. Creditors have a 10 days-period from the last notice published to oppose to the transaction.
  4. If an opposition is filed, the buyer has to withhold from the purchase price the amount of such liability and deposit it as guarantee in an special account in the Banco Nación. The sole deposit shall not imply payment.
  5. That deposit is valid for a 20 day-period in which creditors should place a lien against it. If they don't, after those 20 days the deposit is released.
  6. The creditor who has not placed a lien cannot initiate his claim against the buyer or the assets that are a part of the goodwill once transferred, being the only exception labour creditors, who can claim against both buyer and vendor.
  7. The purchase price shall not be lower than the amount of the liabilities mentioned in (1) along with the ones corresponding to the creditors that had filed an opposition.
  8. If there were no oppositions, or if there were but the previous procedures were followed, the purchase agreement is signed and registered with the Inspección General de Justicia. The transaction is binding to the parties since that signature and to third parties since it is registered. For third parties, said transaction will be valid upon registration.