IGJ Reinstated Provisions Regarding the Unique Corporate Purpose and Rectified Terms of General Resolution 2/2020

Within ​​the City of Buenos Aires, on March 11, 2020, the following General Resolutions of the Public Registry of Commerce (the “IGJ” after its acronym in Spanish) were published in the Official Gazette:

1. Unique corporate purpose. Adequacy ratio between share capital and corporate purpose.

By means of General Resolution 5/2020 (the “Resolution”), the General Resolution 8/2016 (which reversed the provisions of unique corporate purpose and adequacy ratio between share capital and corporate purpose, pursuant to Section 66, paragraphs 2 to 4, and Section 67 of General Resolution 7/2005, respectively) was repealed in its entirety.

According to the Resolution:

1. The corporate purpose must be expressed in a precise and determined way through a concrete and specific description of the activities that will contribute to its effective achievement.
2. Other activities may only be included (described in a precise and determined way) if they are related, accessory and/or complementary to the activities that lead to the achievement of the corporate purpose.
3. The inclusion of multiple corporate purposes, when setting up companies or amending their bylaws, will not be accepted by the IGJ (without prejudice to related, accessory and/or complementary activities described in the foregoing paragraph).
4. The activities described in the corporate purpose must be reasonably related to the company's share capital amount.
5. The IGJ will require a larger initial share capital amount than the one provided in the companies’ articles of incorporation or association, if it observes that the share capital is clearly inadequate due to the nature or characteristics of the activities included in the corporate purpose.

2. Modification of certain terms of General Resolution 2/2020.

By means of General Resolution 6/2020, the following clarifications regarding certain aspects of General Resolution 2/2020 that had generated confusion, are established:

1. Clarifies that the period in which the guarantees to be obtained by the representatives of foreign companies must remain in force, must be the period corresponding to the statute of limitations applicable to compensatory actions for "civil liability", eliminating the former reference to "non-contractual liability". This change was introduced since the Argentine Civil and Commercial Code makes no distinction regarding the contractual or non-contractual basis of such liability.

2. For the sole purpose of amending a typographical error, the term "representes" is replaced by the term "representatives".