Foreign companies - General Resolution PRC No 12/2003

The Public Registry of Commerce (“PRC”) has issued General Resolution PRC No 12/2003 in order to complement General Resolutions PRC No 7/2003 and No 8/2003 (for further comments on these resolutions, please see Marval News # 21 and # 22). Resolution No 12/03 was published in the Official Gazette on December 4, 2003 and will be in force as of January 3, 2004.

Resolution No 12/03 establishes the procedure and requirements to adapt foreign companies, that according to Section 124 of Argentine Companies Law No 19,550 (“ACL”) are considered local companies because their principal activities are developed in Argentina, to Argentine law. The adaptation may be requested by (i) the PRC in accordance with General Resolutions No 7/03 and No 8/03, or (ii) the foreign company.

Resolution No 12/03 provides that the adaptation of the foreign company must be carried out in the form of a public deed signed by the current partners or shareholders and by those that may be included at such moment. The public deed must include, among others, the following requirements:

(i) the identification of the current partners or shareholders and, if applicable, the identification of those partners or shareholders included in that moment;

(ii) an explicit assertion of the partners or shareholders evidencing their intention to regularize the company’s former performance in Argentina by adopting one of the business organizations provided in the ACL;

(iii) evidence of the cancellation of the foreign company’s registration in its place of incorporation or registration;

(iv) the articles of the by-laws or other pertinent agreement that will govern the company;

(v) the appointment of the members of the board of directors or other pertinent administration body and the appointment of the statutory supervisors;

(vi) the establishment of its registered address in the City of Buenos Aires.

Resolution No 12/03 also requires the filing of a special financial statement of regularization, drafted in accordance with Argentine accountancy rules and expressed in local currency. If the business organization adopted is a corporation (sociedad anónima) or a limited liability company (sociedad de responsabilidad limitada) the Resolution also requires the publication set forth in section 10 of the ACL.

To conclude, if the foreign company is registered with the PRC to act as a branch or to participate as partner or shareholder of local companies, the registration of the business organization adopted in accordance with Resolution No 12/03 will imply the cancellation of such registrations.