REFORMS IN REGISTRATION PROCEDURES OF FOREIGN COMPANIES IGJ AND DPPJ (RG IGJ 25/2024 and Provision 64/2024).
Recently, the oversight agencies of the Federal Capital and the Province of Buenos Aires have introduced important changes regarding foreign companies. In short, while the IGJ deregulated and made its regulations more flexible, the DPPJ took as a model (practically copied) the regulations that the IGJ has now repealed.
· IGJ: Resolution 15/2024 has provided for the following reforms:
1. Elimination of the RIA : the obligation to submit the Annual Information Regime for foreign companies has been eliminated
2. Elimination of the procedure for registering resignation: the procedure for resignation by legal representatives without the required documentation or without the acceptance of the parent company is eliminated. This would imply a legal loophole that must be interpreted.
3. Elimination of restrictions on vehicle companies : They may be freely formed and the amount desired by the controlling company.
4. Elimination of the legal representative’s powers (art. 183): The new regulations removed the section that was included among the formal requirements to appoint the legal representative that established a framework for the legal representative’s powers. It mentioned the following: “ participate in the incorporation of the company and/or acquire shares in it, exercise the rights and fulfill the obligations of the foreign company inherent to its status as a partner and respond to judicial or extrajudicial summons made at the registered corporate headquarters in accordance with article 122, paragraph b), of Law No. 19,550 or, where appropriate, at the special address of the representative, in everything related to that status and the obligations and responsibilities derived from it.” The new regulations only require that the parent company’s resolution appoint a legal representative who must be a natural person.
5. Inclusion of the procedure for changing jurisdiction : the same is established for foreign companies within and outside the Federal Capital. (Articles 187 and 188)
6. The effects of non-registration are more lax: it improves the previous version, which was already tempered by Resolution 10/2024. Previously, compliance with the RIAS and the registration of the acting legal representative had to be ruled on, and this could prevent registration. According to this version, prior registration of the foreign company is necessary, either 118 or 123, for the registration of the procedures related to the participating local company, when its participation has been decisive for the formation of the corporate will alone or in concurrence with those of other participants in the act, until they prove that they have complied with the registration required previously. However, non-compliance does not affect the unanimity required by art. 237 LGS. (art. 190). This clarifies that the presence of the non-registered shareholder does not affect the quorum or their votes for the purposes of holding a unanimous meeting.
7. Flexibility regarding legal representation : Now in art. 190 when referring to acts subject to registration either by 123 or 118 it states that they can be carried out by its representative registered in the Public Registry or by an attorney designated by the representative or by an attorney of the company incorporated abroad . According to the previous rule, for art. 118, the acts of companies included in the chapter of habitual activity, permanent seat or representation had to be carried out by its representative registered in the Public Registry on the date of its presentation, or by an attorney appointed as such and exclusively by said representative .
8. Flexibility regarding documentation from abroad (art. 203): The new regulations exceptionally allow the official from the parent company, who has signed the documentation, to present a sworn statement certified by a notary declaring that he has sufficient powers.
9. Validity: The Rules will enter into force on Friday, November 1 of the current year.
· DPPJ: By provision 64/2024 of the DPPJ
1. Regulation of vehicle companies and limit to 1 per group.
2. Annual obligation to submit the RIAS. Failure to do so prevents the registration of the procedures of the local companies in which the company is a shareholder.
3. Obligation to register the foreign company in the DPPJ in the event that it participates in companies based within the province.
4. Regulation of the resignation procedure for legal representatives who do not have approval from the parent company.
5. Incorporation of procedure for transfer of jurisdiction, applying the one used for local companies.
6. Validity: within five (5) business days of its publication in the BO, that is, July 18, 2024.