Latin American Law. Corporate law Basics. Last updated 30 Nov 11. Today’s topics. Civilian business organizations Types: “hub and spoke” Rules (mandatory / default) Organizational basics Formation Promoter / notary / authorization / registration Single act or public subscription
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Last updated 30 Nov 11
State directed economy …
sociedad anónima (SA)
sociedad en comandita (sociedad comanditaria)
sociedad de empresas (en participación)
sociedad de inversiones
sociedad de responsabilidad limitada (SRL)
sociedad por acciones (SpA)
sociedad pública (corporación)
close corporation (not “closed”)
investment company (mutual fund)
limited liability company
1-A / 2-B / 3-C / 4-E / 5-F / 6-H / 7-I / 8-K / 9-J / 10-A / 11-D / 12-G
(civilian bus orgs)
SRL – Argentina
LLC – US
Name (must include SA)
Classes / rights of shares
Amount of capital
Identity of shareholders
Election of directors
What are company “statutes”?
Board of Trustees
Argentina is “a chronically unstable, endemically corrupt polity with a rich history of dictatorship, economic mismanagement and the occasional political lunacy.”
In Argentina, the culture has created a “tendency towards individualism, unwillingness to engage in teamwork and a lack of trust in people.”
Form US branch of polity with a rich history of dictatorship, economic mismanagement and the occasional political lunacy.” Argentine corporation?
Form Argentine branch of US corporation?
Inspeccion General de Justicia
Secretary of State (foreign corporation)
cumulative voting (one-third of the board vacancies)
right to be informed in advance of the shareholder meeting matters
pre-emptive right (right to purchase pro rata in any stock offering)
right to request judicial oversight of the company “as a preventive measure … serious danger to the company.”
right to dividends.
Argentina Business Organizations Act right to
Article 59: The managers of the organization shall act loyally and exercise the level of care of a good businessman. If they neglect their obligations they are responsible unlimitedly and jointly for any harm that may result from their acts or omissions.
A business purpose plays a significant role in Argentine corporate law. In Argentina, the description of a corporation’s objective must be “precise and definite.”
Section 54 of the ACL provides that shareholders of a local corporation shall be held unlimitedly and jointly and severally liable if such corporation has been used as a mere vehicle to pursue goals alien to the corporate purpose, breach the law or the public order or to impair third parties rights
Grupo Financiero Galicia (GGAL)
IESE Business School in Spain: Argentine life is “characterized by making the least possible effort, ignoring the law and seeking individual advantage over any other interest.”
Do “ethics codes” reassure