Limited Liability Companies (Sociedad de Responsabilidad Limitada - SRL)

Information on starting a limited liability company in Argentina...

Capital and partners - A minimum of two and a maximum of 50 partners, who may be individuals or corporate entities (except for SAs and Argentine limited liability companies with share capital (“Sociedades en Comandita por Acciones”), may set up an SRL. Foreign corporate entities have been admitted as partners of SRLs provided that they are empowered to participate in such companies by the laws of their jurisdiction of incorporation.

Capital must be fully subscribed, denominated in Argentine currency and divided into partnership quotas. One quarter (25%) of the capital must be paid up by the partners at the time the SRL is formed and any balance must be paid up within two years thereafter. Where quotas are issued in consideration for contributions in non-monetary assets they must be fully paid up.

Partnership quotas must be of equal par value and entitle the holder to one vote each. Partners in an SRL are entitled to pre-emptive rights with respect to new issues of quotas.

Management and representation - The partners may appoint one or more managers to manage the company, who may be partners, employees or third parties. The managers represent the company, either individually or jointly, as provided for in the by-laws.

Partners' meetings - SRL by-laws normally contain the rules for adopting resolutions, therefore, unless the by-laws provide otherwise, resolutions may be passed in writing without the need for holding a meeting. If one partner holds the majority vote, the vote of another partner will be necessary in order for the Partners’ Meeting to be considered valid.

Supervision - The appointment of a statutory supervisor or the creation of a supervisory committee is optional for SRLs unless their capital amounts to A$ 10,000,000 or more, in which case one or more statutory supervisors or a supervisory committee must be appointed. When statutory supervisors or a supervisory committee are appointed, the rules for SAs generally apply.

Partners and Managers Liability - In general, and with a few exceptions, similar rules apply to SRLs and SAs, however, where there is more than one manager liability will depend upon the provisions of the by-laws.

Information supplied by Marval, O'Farrell & Mairal Av. Leandro N. Alem 928 piso 7, (C1001AAR) Buenos Aires, Argentina Tel: (011) 4310-0100, Fax: (011) 4310 0200 www.marval.com.ar