A new paradigm in corporate law? The SAS has come to stay.
The SAS, regulated by Act 27,349, of Support for Entrepreneurial Capital, has as its main objective to promote entrepreneurial activity and capital generation in our country, as well as its international expansion.
This new type of company grants multiple benefits, such as the possibility of a single member, may be incorporated by one or several human or companies and does not require a maximum number of shareholders.
In addition, the responsibility of its partners is limited to the number of shares subscribed or acquired, notwithstanding that the partners are jointly and severally obliged by their contributions to third parties.
Therefore, the entrepreneur who owns a SAS will have limited liability to the capital subscribed to the company, thus limiting the risks to prospective contingencies.
Another advantage is that the minimum capital provided, can be equal to twice the minimum labor salary (approximately AR$23,000).
Which requirements must be met for its incorporation? The SAS may be incorporated by deed or a private agreement. If it is incorporated by a private agreement, the partners’ signature must be certified by a public notary. The by-laws must contain at least:
I. The name, age, marital status, citizenship, profession, address, ID number, CUIT, if the company has companies as shareholders, its name or business name, address and headquarters, partners details, CUIT.
II. The company name that must contain the expression “Sociedad Anónima Simplificada”, or its abbreviation SAS. The omission of this mention will make the company ́s shareholders or representatives jointly and severally liable.
III. The address of the company and its headquarters.
IV. The corporate purpose, which may be broad and plural. Its activities may have or not connection or relationship among them.
V. The term of duration, which must be determined.
VI. The share capital and the contribution of each partner, which must be expressed in local currency, stating the classes, kinds of issuance and other characteristics of the shares and, if applicable, their rates of increase.
The contributions in cash must be integrated at least in a twenty-five percent (25%) threshold at the time of subscription. The outstanding balance subscription may not exceed the maximum term of two (2) years. Contributions in kind must be integrated in full at the time of subscription.
VII. The organization of the administration, the shareholder’s ́ meetings. The members of the administration will be identified, establishing the term of duration and indicating the address where all the notifications shall be valid. In all cases, a legal representative must be appointed.
VIII. The procedure to distribute the profits and bear the losses.
IX. The necessary clauses to establish the rights and duties of the partners among themselves and with respect to third parties.
X. The clauses related to its operation, dissolution, and liquidation.
XI. The closing date of the financial statements.
Once all these requirements have been fulfilled, the registration stage proceeds The corresponding documentation must be presented before the public registry, that after checking the compliance of the formal requirements, will proceed to its incorporation, which will be within the term of twenty-four (24) hours, from the business day following the presentation of the said documentation.
Another advantage is the simplification in the process since it establishes that financial institutions must provide mechanisms to enable SAS to open a bank account within a short period -to be established by the regulations-, requiring only the presentation of its by-laws duly registered and proof of CUIT.
It is important to note which are the limitations, both to register, and maintain its legal status: (I) It must not be included in any of the events provided for in paragraphs 3, 4 and 5 of article 299 of the Companies Act 19,550; (II) It must not be a partially or wholly-owned state enterprise or included in Section VI; (III) Not to undertake capitalization, savings or in any other way require funds or securities from the public with promises of benefits or future benefits; (IV) Not to exploit concessions or public services; (V) Not to be controlled by or participate in more than 2 thirty percent (30%) of the capital of companies included in the cases mentioned in paragraph 1 above.
In the event that SAS falls within one of the circumstances abovementioned, it must be transformed into one of the types included in the Companies Act 19,550, and register the said transformation in the public registry, within a period not exceeding six (6) months of that event. The transformation will not be obligatory if before that term, the SAS ceases to be framed in any of the before mentioned events.
Upon expiration of the indicated period without the registration of the transformation in the public registry, the partners shall be liable jointly and severally towards any third parties. Also, it is important to note that the one-single member SAS cannot constitute or participate in another one-single member SAS.
Just to finish this brief article regarding SAS, we may say that they are a very valuable vehicle that simplifies the creation of an enterprise, seeking greater autonomy and independence of the private. It seeks to ensure the introduction of small and medium enterprises to the formalization of employment, and subject to a less rigorous and more flexible legal regulation that are in line with the changes needed by small players in our local economy.
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This article has been drafted by Yanira S. Isuani and Facundo Correa Cremaschi. For more information, contact the above telephone numbers or by e-mail to fcc@correacremaschi.com.
This is a courtesy of CORREA CREMASCHI ABOGADOS for its clients and friends. It is not intended to provide legal advice on any topic.