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  • Form of entity

    Corporation (Sociedad Anónima or SA)

    Separate and distinct legal entity. Admits a minimum of 2 shareholders. Managed by a board of directors who are elected by the stockholders of the corporation.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Separate and distinct legal entity. Admits exclusively 1 shareholder. SAUs are not allowed to be incorporated or wholly owned by SAUs. Managed by a board of directors who are elected by the only stockholder of the corporation.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    Separate and distinct legal entity. Admits 1 or more shareholders. Managed by a board of directors who are elected by the stockholders. There is an established form of bylaws and public notice that, if used, shall enable the registration of the SAS within five business days in the City of Buenos Aires. This corporate type aims to be a more agile and economic alternative both in its incorporation and in the administration and management. Its incorporation and development are entirely digital.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    Separate and distinct legal entity. Admits a minimum of two members and a maximum of fifty. Managed by a single manager or several managers with full powers who may act individually, or by a Board of Managers acting by majority, appointed by the members.

  • Entity set up

    Corporation (Sociedad Anónima or SA)

    • Two or more shareholders
    • The local management is in charge of a board of directors, which may have at least one member with no maximum number (at least three directors and one alternative director in case the company's capital stock exceeds ARS50 million). Directors shall last between one and three years in office, as provided in the bylaws. They may be re-elected. The majority of the board of directors must be composed of Argentine residents.
    • The president of the board is the legal representative of the company
    • Statutory auditor is optional. Mandatory if capital stock exceeds ARS50 million
    • Typical charter document: bylaws
    • Corporate Books: stock ledger, shareholders' meeting minutes, board of directors' meeting minutes and attendance records book
    • Should cash be paid out as consideration for the stock: only 25 percent must be paid up front, and the balance is paid within two years after that. When considerations for the stock are contributions in kind, the stock must be fully paid off at the time of subscription of the shares

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    • Only one shareholder
    • The local management is in charge of a board of directors, which may have at least one member with no maximum number (at least three directors and one alternative director in case the company's capital stock exceeds ARS50 million). Directors shall last between one and three years in office, as provided in the bylaws. They may be re-elected. The majority of the board of directors must be composed of Argentine residents
    • The president of the board is the legal representative of the company
    • Permanent control by government
    • Statutory auditor is mandatory (at least one regular and one alternate statutory auditor)
    • Typical charter document: bylaws
    • Corporate books: stock ledger, shareholders' meeting minutes, board of directors' meeting minutes and attendance records book
    • Capital stock shall be fully paid up upon execution of bylaws
    • SAUs are not allowed to be incorporated or wholly owned by another SAU

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    • One or more shareholders
    • The managers must be individuals, who may be appointed for an indefinite period. At least one director must be an Argentinean resident (provided that the Argentinian resident director is the legal representative of the company)
    • Statutory auditor is optional
    • Corporate books: carried by electronic means (stock ledger, minutes and attendance records book)
    • Should cash be paid out as consideration for the stock: only 25 percent needs to be paid up front, and the balance is paid within two years after that. When considerations for the stock are contributions in kind, the stock must be fully paid off at the time of subscription of the shares

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    • Two or more members
    • The local management is in charge of single or several managers with full powers who may act individually, or a board of managers acting by majority. Managers may be appointed for an indefinite term. The majority of the board of managers must be composed of Argentine residents
    • The legal representative of the company may be a single manager. All managers or a president of the board of managers are entitled with full powers
    • Statutory auditor is optional. Mandatory if capital stock exceeds ARS50 million (at least one regular and one alternate member)
    • Typical charter document: bylaws
    • Corporate books: manager and quotaholders’ meeting minutes.
    • Should cash be paid out as consideration for the stock: only 25 percent must be paid up front, and the balance is paid within two years after that. When considerations for the stock are contributions in kind, the stock must be fully paid off at the time of subscription of the shares.
  • Minimum capital requirement

    Corporation (Sociedad Anónima or SA)

    Minimum capital of SA is ARS100,000.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Minimum capital of SAU is ARS100,000.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    Minimum capital of SAS shall be twice the national minimum vital and mobile wage established at the time of its incorporation (as of March 2021: ARS43,200).

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    No minimum capital requirement.

  • Legal liability

    Corporation (Sociedad Anónima or SA)

    Directors must act honestly and in good faith in best interests of the company. Directors may be held personally liable to the company, shareholders and third parties if they fail to comply with their general legal duties or specific duties contained in Argentine Law 19,550.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Directors must act honestly and in good faith in best interests of the company. Directors may be held personally liable to the company, shareholders and third parties if they fail to comply with their general legal duties or specific duties contained in Argentine Law 19,550.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    Liability of directors of a corporation under Law 19,550 is applicable to SAS managers. In addition, individuals who are not managers or legal representatives of an SAS, or legal persons acting as managers, are liable in the same way as managers, and their liability will be extended to the acts in which they did not intervene but which they habitually performed.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    In case of SRLs, when articles allow distribution of management powers among individual members of the board of managers, the board's liability depends on the individual performance of each manager.

  • Tax presence

    Sociedad Anónima (Corporation) and SRL (LLC)

    An SA, same as an SRL (LLC), is considered an Argentine resident for tax purposes and is obligated to pay taxes on income obtained worldwide, whether earned within Argentina or abroad. An SA may take the sums effectively paid abroad for analogous taxes for activities carried out abroad as a payment for taxes (within certain limits).

  • Incorporation process

    Corporation (Sociedad Anónima or SA)

    File bylaws for registration with the Public Registry. An "urgent" registration process may be followed to obtain the company's registration and its tax ID within 5 business days, in case no observations are made by the Public Registry in the City of Buenos Aires.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    File bylaws for registration with the Public Registry. An "urgent" registration process may be followed to obtain the company's registration and its tax ID within 5 business days, in case no observations are made by the Public Registry in the City of Buenos Aires.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    File bylaws for registration with the Public Registry. There is an established form of bylaws and public notice that, if used, shall enable the registration of the SAS within 5 business days through digital means in the City of Buenos Aires.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    File bylaws for registration with the Public Registry. An "urgent" registration process may be followed to obtain the company's registration, its tax ID and corporate books within 5 business days, in case no observations are made by the Public Registry in the City of Buenos Aires.

  • Business recognition

    Corporation (Sociedad Anónima or SA)

    Well regarded and widely used.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    This corporate type was introduced in Argentina in August 2016 pursuant the Argentine Civil and Commercial Code modification and is beginning to be used.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    This corporate type aims to be a more agile and economic alternative, both in its incorporation and in administration and management. Its incorporation and development is entirely in digital form.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    Well regarded and widely used. This is the type of company is usually preferred by foreign shareholders due to tax purposes.

  • Shareholder meeting requirements

    Corporation (Sociedad Anónima or SA)

    Required to hold an annual meeting of shareholders to approve the financial statements of the company.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Required to hold an annual meeting of shareholders to approve financial statements of the company.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    Required to hold an annual meeting of shareholders to approve financial statements of the company.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    Required to hold an annual meeting of members to approve financial statements of the company.

  • Board of director meeting requirements

    Corporation (Sociedad Anónima or SA)

    The board shall meet at least once every 3 months.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Periodical meetings of the board are not required.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    Periodical meetings of the board are not required.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    Periodical meetings of managers are not required.

  • Annual company tax returns

    All corporations must annually file tax returns with federal and state tax authorities.

  • Business registration filing requirements

    Corporation (Sociedad Anónima or SA)

    Initial registration is required, as well as annual filings (ie, financial statements of the company before the Public Registry and the Tax Authority). Every appointment or resignation of directors, change of domicile or bylaws' amendments must be filed with the Public Registry for registration.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Initial registration is required, as well as annual filings (ie, financial statements of the company before the Public Registry and the Tax Authority). Every appointment or resignation of directors, change of domicile or bylaws' amendments must be filed with the Public Registry for registration.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    Initial registration is required. SAS does not file its financial statements with the Public Registry, but these documents must be filed with the Tax Authority. Every appointment or resignation of directors, change of domicile or bylaws' amendments must be filed with the Public Registry for registration.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    Initial registration is required. Only SRLs which capital stock exceeds ARS50 million shall file their annual financial statements with the Public Registry. However, all SRLs must file their financial statements with the tax authorities.

  • Business expansion

    Corporation (Sociedad Anónima or SA)

    No need to change as business expands.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    If the number of shareholders exceeds 1, the SAU must convert to an SA or SAS.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    No need to change as business expands.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    If the number of members exceeds 50, the SRL must convert to an SA or SAS.

  • Exit strategy

    Any corporate type shall file dissolution documents with the Public Registry.

  • Annual corporate maintenance requirements

    Corporations and single-shareholder corporations must pay annual fee to the Public Registry.

  • Director / officer requirements

    Not applicable for this jurisdiction.

    For more information on directors’ duties, see our Global Guide to Directors’ Duties.
  • Local corporate secretary requirement

    Not applicable for this jurisdiction.

  • Local legal or admin representative requirement

    Not applicable for this jurisdiction.

  • Local office lease requirement

    In some circumstances, the Tax Authority requires evidence of the declared domicile.

  • Other physical presence requirements

    Not applicable for this jurisdiction.

  • Sufficiency of virtual office

    Not applicable for this jurisdiction.

  • Provision of local registered address by law firm or third-party service provider

    A company must provide its registered address. In certain circumstances, a law firm office may provide the registered address until the local entity hires an office. In this case, the company is requested to move its registered office to its new location.

  • Provision of local director or corporate secretary by law firm or third-party service provider

    A company shall provide a local director. In certain circumstances, a law firm may provide a local director service at a monthly rate.

  • Nationality or residency requirements for shareholders, directors and officers

    Corporation (Sociedad Anónima or SA)

    Majority of members of the board must be Argentinean residents.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Majority of the members of the board must be Argentinean residents.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    At least 1 director must be Argentinean resident (provided that the Argentinean resident director is the legal representative of the company).

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    Majority of the members of the board must be Argentinean residents.

  • Restrictions regarding appointment of nominee shareholders or directors

    Not applicable for this jurisdiction.

  • Summary of director's, officer's and shareholder's authority and limitations thereof

    Not applicable for this jurisdiction.

  • Public disclosure of identity of directors, officers and shareholders

    Not applicable for this jurisdiction.

  • Minimum and maximum number of directors and shareholders

    Corporation (Sociedad Anónima or SA)

    • 2 or more shareholders
    • Board of directors, which must have at least 1 member with no maximum number requirement (at least 3 directors and 1 alternative director in case the company's capital stock exceeds ARS50 million)

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    • 1 shareholder
    • Board of directors, which must have at least 1 member with no maximum number requirement (at least 3 directors and 1 alternative director in case the company's capital stock exceeds ARS50 million)

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    • 1 or more shareholders
    • The managers must be individuals, who may be appointed for an indefinite period

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    • 2 or more members (within a maximum of 50 members)
    • The local management is maintained by a single manager, several managers with full powers who may act individually, or a board of managers acting by majority. Managers may be appointed for an indefinite term
  • Minimum number of shareholders required

    Corporation (Sociedad Anónima or SA)

    At least 2 or more shareholders.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Only 1 shareholder is admitted.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    At least 1 shareholder.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    At least 1 or more members.

  • Removal of directors or officers

    Removal of directors or managers shall be approved by the shareholders meeting and then registered in the Public Registry.

  • Required and optional officers

    Not applicable for this jurisdiction.

  • Board meeting requirements

    Not applicable for this jurisdiction.

  • Quorum requirements for shareholder and board meetings

    Corporation (Sociedad Anónima or SA)

    The Board makes decisions by a simple majority of directors present at the relevant meeting, with a quorum of an absolute majority of total number of directors, unless the company's articles provide for a higher quorum and majority.

    In case of annual or regular shareholders' meetings, the required quorum shall be constituted by shareholders representing the majority of the voting shares. If quorum is not reached, the meeting may be held at a second call. In this case, the meeting is duly constituted with any number of shareholders present. On the other hand, special meetings require the presence of shareholders representing 60 percent of the voting shares, unless the articles provide for a higher quorum. If quorum is not reached, the meeting may be held at a second call. In this case, the meeting is duly constituted with the presence of shareholders representing 30 percent of the voting shares, unless the articles provide otherwise.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    The board makes decisions by a simple majority of directors present at the relevant meeting, with a quorum of an absolute majority of total number of directors, unless the company's articles provide for a higher quorum and majority.

    In the case of shareholders' meeting, quorum is reached if at least 1 shareholder of the company is present.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    Meetings may be held physically or through digital means (ie, video or teleconference). Managers and members may call themselves to hold deliberations, with no need of prior notice. The management body's resolutions are valid as long as all members attend, and the majority as stated in the bylaws approve the agenda. Member's resolutions will be valid, provided that all partners attend and the agenda is passed unanimously.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    The board makes decisions by a simple majority of the managers present at the relevant meeting, with a quorum of an absolute majority of total number of directors, unless the company's articles provide for a higher quorum and majority.

    In case of annual or regular members' meetings, required quorum is constituted by the shareholders representing the majority of the voting shares. If quorum is not reached, the meeting may be held at a second call. In this case, the meeting is duly constituted with any number of shareholders present. On the other hand, special meetings require the presence of members representing 60 percent of voting shares, unless articles provide for a higher quorum. If quorum is not reached, a meeting may be held at a second call. In this case, the meeting is duly constituted with the presence of members representing 30 percent of voting shares, unless the articles provide otherwise.

  • Must a bank account be opened prior to incorporation, and must the bank account be local?

    Not applicable for this jurisdiction.

  • Auditing of local financials. If so, must the auditor be located in local jurisdiction, and must the company's books be kept locally?

    All companies must have at least annual financial statements audited. The auditor must be located in Argentina and the company's corporate and accounting books must be kept locally.

  • Requirement regarding par value of stock

    Not applicable for this jurisdiction.

  • Increasing of capitalization if needed

    Not applicable for this jurisdiction.

  • Summary of how funds can be repatriated from your jurisdiction (ie dividends or redemption)

    When approving annual financial statements, shareholders' meeting may resolve to distribute dividends, which will be transferred to respective shareholders.

  • Restrictions on transferability of shares

    Corporation (Sociedad Anónima or SA)

    No restrictions, unless otherwise provided in bylaws. Transfers are reported to the company and recorded in the Stock Ledger Book.

    Single-Shareholder Corporation (Sociedad por Acciones Unipersonal or SAU)

    No restrictions, unless otherwise provided in bylaws. Transfers are reported to the company and recorded in the Stock Ledger Book.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    No restrictions, unless otherwise provided in bylaws. Transfers are reported to the company and recorded in the Stock Ledger Book.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    No restrictions, unless otherwise provided in bylaws. Transfers shall be reported and registered with the Public Registry of Commerce.

  • Obtaining a name and naming requirements

    Corporate name must contain the type of company it adopted. Name may be reserved before registering the company by paying and filing a form with the Public Registry, in case the chosen name is available.

  • Summary of "know your client" requirements

    Not applicable for this jurisdiction.

  • Approval requirements for amending charter document

    Amendments to bylaws in all companies must be approved by shareholders or members' meeting and then filed for registration by the Public Registry.

  • Licenses required to conduct business in jurisdiction

    Not applicable for this jurisdiction.

  • Process of purchasing and utilizing a shelf company

    Not applicable for this jurisdiction.

  • Key contacts
    Antonio Arias
    Antonio Arias
    Partner DLA Piper (Argentina) [email protected] T +5411 4114 5500 View bio

Increasing of capitalization if needed

Argentina

Not applicable for this jurisdiction.

Australia

Branch

Not applicable – this is subject to the requirements of the foreign company's place of incorporation.

Proprietary company

There is no concept of authorized or maximum capital. Increased capitalization may occur at any time and must be authorized by ordinary resolution of directors.

Public company

There is no concept of authorized or maximum capital. Increased capitalization may occur at any time and must be authorized by ordinary resolution of directors.

Austria

Stock corporation (AG)

Effectuated by amending the articles of association, which requires a 75-percent majority of the shareholders (unless the articles of association provide for a different majority, but in no case less than 50 percent of the votes cast).

Limited liability company (GmbH)

Effectuated by amending the articles of association, which requires a 75-percent majority of the shareholders.

Bahrain

With Limited Liability (WLL)

Typically a general assembly is required and a draft amended memorandum of association pertaining to the capital increase must be submitted to the MOICT and CBB. An approval from the MOICT and CBB (if applicable) must be obtained.

Closed Shareholding Company (BSC(c))

Typically a general assembly is required and a draft amended memorandum of association and articles of association pertaining to the capital increase must be submitted to the MOICT and CBB (if the company exercises CBB regulated activities). An approval from MOICT and CBB (if applicable) must be obtained.

Foreign Branch (Branch)

Not applicable.

Belgium

Public limited company (société anonyme/naamloze vennootschap)

In case, due to the losses sustained, the net assets of the public limited company should have dropped below 1/2 of the public limited company's share capital, the general shareholders' meeting must meet within no more than 2 months after the loss has or should have been established, as the case may be, in order to deliberate and resolve on a winding up of the public limited company.

The board of directors must justify its proposals in a special report such as Article 7:228 (and Article 7:229 of the BCCA).

If the board of directors proposes to continue the activities of the public limited company, it must set out in its report the measures it is considering to redress the financial condition of the public limited company.

If the net assets of the public limited company have fallen below the minimum required capital, any interested party or the public prosecutor's office can demand the dissolution of the public limited company in court.

Limited company (société à responsabilité limitée/besloten vennootschap)

In case, due to the losses sustained, the net assets of the limited company have become negative or threaten to become negative, the general shareholders' meeting must meet within no more than 2 months after the situation has been discovered in order to deliberate and resolve on a winding up of the limited company. The board of directors must justify its proposals in a special report such as Article 5:153 of the BCCA.

If the board of directors proposes to continue the activities of the limited company, it has to set out in its report the measures it is considering redressing the financial condition of the limited company.

After having complied with the abovementioned duties, the board of directors is not obliged to convene the general shareholders' meeting for the same reason in the next 12 months after such convocation.

Belgian branch office of a foreign company

Not applicable as a Belgian branch office has no capital.

Brazil

Limited liability company (Sociedade Limitada)

The company's capital can only be increased once it is fully paid in and upon the registration of an amendment to the articles of organization. According to the Brazilian Civil Code, each quotaholder has the pre-emptive right to subscribe the new quotas issued in a capital increase, proportionally to the equity held by each of them in the company's capital.

Corporation (Sociedade Anônima)

Effectuated by amending the bylaws, which requires authorization from the shareholders. If the corporation has a board of directors, the shareholders may establish an authorized capital. In this case, the capital may be increased within the limit of the authorized capital by means of a resolution of the board of directors, without the necessity of amending the bylaws.

A capital increase may only occur once, at least, 3/4 of the company's capital is fully paid in.

Canada

Corporate subsidiary (Corporation form rather than flow-through form)

An increase in authorized capital may be effectuated by amending the articles of incorporation, which requires authorization, generally, from 2/3 of the shareholders at a meeting and all the shareholders if by resolution in writing.

Chile

Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

Capital is represented by equity rights and is established in the bylaws. The amount of the company's capital may be increased or decreased by means of an amendment to the company’s articles of bylaws (complying with formal requirements that include a public deed, registration and publication).

Decreases in capital amount must be authorized in advance by the tax authority.

Corporation (Sociedad Anónima or S.A.)

Capital is divided into shares and is established in the bylaws. It shall be subscribed to and paid within a period of no longer than 3 years. If not, capital will be decreased ipso jure to the amount already subscribed to and paid. Capital may only be increased or decreased by agreement of the shareholders’ meeting. That agreement shall be reflected in an amendment of bylaws (complying with formal requirements that include the public deed, registration and publication).

In public corporations, capital increases must be authorized by the CMF and the new shares must be registered in the Securities Registry of the CMF.

Decreases in capital amount must be authorized in advance by the tax authority.

Simplified Corporation (Sociedades por Acciones or SpA)

Capital is divided into shares. Capital and the term to pay it is established in the bylaws. In case of silence, the term will be 5 years. If not, capital will be decreased ipso jure to the amount already subscribed to and paid.

Bylaws may establish minimum or maximum percentages of capital to be controlled, directly or indirectly, by a 1 or more shareholders.

Capital increases or decreases shall be agreed by shareholders in a special shareholder meeting, and such agreement shall be reflected in an amendment of bylaws (complying with formal requirements that include a public deed, registration and publication). However, in an SpA, bylaws may be amended by all shareholders without the need for a meeting, if all shareholders subscribe to the bylaw amendment, public deed or a private document registered with a notary (complying with formal requirements that include registration and publication).

In an SpA, bylaws may authorize the manager to increase capital of the SpA with the purpose of financing the management of the company or for specific purposes. In this case, a shareholders’ meeting is not required.

Decreases in capital amount must be agreed by shareholders with the quorum set out in bylaws. In case of silence, the quorum required will be unanimity. Decreases in capital amount must be authorized in advance by the tax authority.

Branch of a Foreign Legal Entity (Agencia)

The statement made by the agent shall contain the effective capital of the branch and the date and form in which such capital will be entered into the branch.

In order to increase or decrease the branch’s capital, the agent shall make, by public deed, a statement modifying the one that established the branch. An abstract of such public deed shall be registered in the Commercial Registry correspondent to the branch’s domicile and published in the Official Gazette within 60 days. Additionally, compliance of exchange rules is required. Decreases in capital amount must be authorized in advance by the tax authority.

China

Effectuated by amending the articles of association and joint venture contract (if applicable), which requires both registration with the AMR and information reporting to the MOFCOM. Among other application documents, the shareholder resolutions are required for application with the AMR.

Colombia

General partnership (Sociedad Colectiva)

An increase of the company's capital must be executed through a bylaw reform and registered before the Registry of Commerce.

Limited partnership (Sociedad en Comandita Simple y por Acciones)

An increase of the company's capital must be registered before the Registry of Commerce.

Limited liability company (Sociedad de Responsabilidad Limitada)

An increase of the company's capital must be registered before the Registry of Commerce.

Corporation (Sociedad Anónima)

An increase of the company's capital must be approved by the shareholders general assembly, and an increase in the authorize capital must be completed through a bylaw reform registered before the Registry of Commerce.

Simplified stock company (Sociedad por Acciones Simplificada)

An increase of the company's capital must be approved by the shareholders general assembly, and an increase in the authorize capital must be completed through a bylaw reform registered before the Registry of Commerce.

Czech Republic

Limited liability company

More usual are debt-to-equity swaps, ie, capitalization of receivables with set-off against contribution to equity, without effect of increasing share ownership of a shareholder in the company. Alternatively by increase of registered capital subject to approval of shareholders’ meeting.

Joint stock company

Increase of registered capital subject to approval of shareholders’ meeting.

Denmark

Limited liability company (Kapitalselskab)

The share capital may be increased or decreased by following the procedures stipulated in the Danish Companies Act, which generally requires a decision by qualified majority of the shareholders.

Adopted by the shareholders' meeting, the articles of associations must be changed accordingly (in general a majority of 2/3 of the votes as well as of the represented capital at the shareholders' meeting is required to change the article of associations).

The share capital may not be decreased below the company's legal minimum share capital.

Egypt

Corporations

Capital may be increased any time after incorporation. It requires an EGM's resolution and must be reflected in the AoI or AoA of the company and its commercial register. In case of a JSC, if the capital increase is within the authorized capital, such increase will not require an EGM’s resolution and could be made by virtue of a BoD resolution.

Branch

Not applicable for this jurisdiction.

RO

Not applicable for this jurisdiction.

Finland

Osakeyhtiö (Oy)

The issue of new shares in relation to prior shareholdings may be decided by a simple majority of the shareholders' meeting. If the issue is not in relation to prior shareholdings, a qualified majority will be needed. The shareholders' meeting may authorize the board of directors to decide about the issue of new shares. The issue of new shares needs to be registered in the Trade Register. If the articles of association must be amended, a decision by the shareholders' meeting with a qualified majority is needed.

France

Société par actions simplifiée (SAS)

Effectuated by amending the bylaws which requires a majority of the shareholders according to the provisions of the bylaws. In the event of a capital increase, the shareholders have a preferential subscription right.

Société à responsabilité limitée (SARL)

Effectuated by amending the bylaws, which requires a majority of the shareholders, the shareholders have a preferential subscription right if provided for in the bylaws or by a decision of the general meeting.

Société anonyme (SA)

Effectuated by amending the bylaws, which requires a majority of the shareholders. In the event of a capital increase, the shareholders have a preferential subscription right.

Germany

GmbH – limited liability company

Effected by amending the articles of association, which requires a notarized shareholders’ resolution.

Greece

Societe anonyme (S.A.)

Increase of the share capital may be made either by decision of the general meeting of shareholders, with the ordinary or extraordinary quorum and majority or by a decision of the board of directors, according to the provisions of Greek law and the articles of association of the company. Increase of the company capital may only take place through amendment of the articles of association and following a resolution of the general meeting. Accordingly, the share capital increase is effectuated as soon as the essential registrations to the General Commercial Registry are made.

Limited liability company (L.T.D.)

Increase of the company capital takes place through amendment of the articles of association and following a resolution of the general meeting taken with the extraordinary quorum and increased majority and pursuant to Greek law. Accordingly, the share capital increase is effectuated as soon as the essential registrations to the General Commercial Registry are made.

Private company (P.C.)

Increase of the company capital takes place through amendment of the articles of association and following a resolution of the general meeting taken with the extraordinary quorum and majority and pursuant to Greek law. Accordingly, the share capital increase is effectuated as soon as the essential registrations to the General Commercial Registry are made.

Hong Kong, SAR

Limited private companies

The company may:

  • Increase its share capital without allotting and issuing new shares, if the funds or other assets for the increase are provided by the members of the company
  • Capitalize its profits, with or without allotting and issuing new shares, and
  • Allot and issue bonus shares with or without increasing its share capital.

Hungary

Registered capital can be increased by a resolution of a shareholders' or quotaholders' meeting. In the case of Zrts, the general meeting often authorizes the board of directors to increase the registered capital (issue new shares).

The effective date of the capital increase may be set out in the pertaining resolution, but it cannot be earlier than the date of the resolution.

In order to cover the losses of the Kft., the quotaholders' meeting may order that the quotaholders provide supplementary contributions (pótbefizetés). The supplementary contributions must be repaid to the quotaholders if financial position of the Kft allows for such repayment.

India

Private limited company

Effectuated by amending the charter document, which requires authorization from both the board of directors and a majority of the shareholders. Further filling requirements with the ROC apply along with the payment of filing fees calculated based on the amount of authorized capital being increased.

Indonesia

Limited liability company

The capital of an Indonesian limited liability company consists of its authorized, issued and paid-up capital. An increase in capital must be approved under the general meeting of shareholders resolutions. The articles of association must be amended and approval must be obtained from the MOLHR for the increase of the authorized capital. Receipt of notification from the MOLHR must be obtained for the increase of the issued capital and paid-up capital.

Ireland

Private company limited by shares (LTD)

Generally permitted. A company may increase its share capital by issuing and allotting further shares provided that the company's constitution authorizes such action.

 

External company

Determined by the laws of the jurisdiction of incorporation.

Israel

Company

Effectuated by shareholder action.

Branch / representative office

Not applicable.

Italy

Società a responsabilità limitata (S.r.l.) and Società per azioni (S.p.A.)

In order to resolve upon the increase in the corporate capital of a S.r.l. or S.p.A., a proper extraordinary quota-holders meeting must be held in front of the Italian Notary Public. The relevant decision is approved with the majorities provided by the articles of association.

Japan

Registered branch

Depends on the governing law of the foreign company.

Kabushiki-Kaisha (KK)

Increase of stated capital may be done by issuance of new shares. Filing the changes of the stated capital and the number of shares with the Legal Affairs Bureau is required.

Godo-Kaisha (GK)

Increase of stated capital may be done by capital injection by existing/new members. Filing the changes of the stated capital with the Legal Affairs Bureau is required.

Luxembourg

Private limited liability company (Société à responsabilité limitée or S.à r.l.)

The share capital of an S.à r.l. can be increased through a contribution in kind or cash by a decision of an extraordinary shareholders' meeting (held in the presence of a Luxembourg notary).

The articles of association of the company may provide for authorized capital, in which case the share capital of the company can be increase by a decision of the board of managers, within the limits of the articles and subsequently recorded by notarial deed.

Equity contributions without the issuance of any shares can also be made to the capital contribution account of an S.à r.l. (account 115 "compte des apports des actionnaires non rémunérés par des titres" of the Luxembourg Chart of Accounts) connected to the shares of such company.

Public limited liability company (Société anonyme or S.A.)

The share capital of an SA can be increased through a contribution in kind or cash by a decision of an extraordinary shareholders' meeting (held in the presence of a Luxembourg notary public). In case of a contribution in kind, the value of such contribution must, in principle, be certified by an external auditor (réviseur d'entreprises agréé) to the Luxembourg notary. The general meeting may limit or suppress the preferential subscription rights of the existing shareholders when increasing the share capital.

The company’s articles of association may provide for an authorized capital, in which case the share capital of the company can be increased by a decision of the board of directors, within the limits of the articles, and subsequently recorded by notarial deed. The articles of association may allow the limitation or suppression of the preferential subscription rights of the existing shareholders by the board of directors when increasing the share capital of the company using the authorized capital.

Equity contributions without the issuance of any shares can also be made to the capital contribution account of an SA (account 115 "compte des apports des actionnaires non rémunérés par des titres" of the Luxembourg Chart of Accounts) connected to the shares of such company.

Special limited partnership (Société en commandite spéciale or SCSp)

Conditions to be determined in the limited partnership agreement.

Malaysia

Not applicable for this jurisdiction.

Mauritius

There is no concept of authorized or maximum capital. Increased capitalization can occur at any time and must be authorized by ordinary resolution of directors or as otherwise determined by the Constitution of the company.

Mexico

S.A. de C.V.

Depends if made to the fixed part, then approval of an extraordinary shareholders meeting is required and the amendment of the bylaws; if made to the variable part, approval of an ordinary shareholders meetings is required.

S. de R.L. de C.V.

Depends if made to the fixed part, then approval of an extraordinary partners meeting is required and the amendment of the bylaws; if made to the variable part, approval of an ordinary partners meetings is required.

S.A.P.I. de C.V.

Depends if made to the fixed part, then approval of an extraordinary shareholders meeting is required and the amendment of the bylaws; if made to the variable part, approval of an ordinary shareholders meetings is required.

Netherlands

Branch office

Determined by governing law of the head office.

B.V. (private company with limited liability)

The articles of a BV only require mentioning the par value per share, not the amount of issued capital. Issuance of additional shares requires execution of a notarial deed before a civil law notary in the Netherlands on the basis of a shareholders’ resolution (and powers of attorney of the BV and the acquirer, unless they personally appear in front of the notary). A shareholder can also contribute capital on the already existing shares it holds in the capital of the BV by way of a share premium contribution (without issuance of shares).

Co-operative U.A.

The articles of a co-operative do not mention the amount of its capital; they only mention in which currency the member accounts are denominated. The membership agreement or, if so determined in the articles, the general meeting of members can commit a member to make a payment of initial or additional equity into the co-operative, which will be credited to the member account kept by the co-operative in such member’s name.

C.V. (a limited partnership)

The partners of the CV must each make an initial contribution in the form of capital or other assets. Generally, the limited partner contributes cash and/or goods. If the general partner does not contribute cash or goods, it can, for example, contribute the know-how, skills and experience required to conduct the business of the CV. The partnership agreement of a closed CV often requires that additional capital contributions to the CV after its formation require the prior unanimous written consent of all partners.

New Zealand

Limited liability company

There is no concept of authorized or maximum capital. Increased capitalization can occur at any time and must be authorized by ordinary resolution of directors, unless the constitution states otherwise. However, if the capitalization results in an offer to the public, compliance with the FMCA will be required.

Branch

Not applicable – this is subject to the requirements of the overseas company's place of incorporation.

Nigeria

A company having a share capital may increase its issued share capital by way of a resolution of the shareholders at a general meeting by the creation of new shares of such amount as it believes to be expedient. The Nigerian Company Law requires for at least 25 percent of the share capital including any increase to be paid up. Following an increase in its share capital, the company will be required to, within 15 days after the passing of the resolution, file with the local registry the particulars of the increase in the share capital.

Norway

Private LLCs and public LLCs

Share capital increases are adopted by the general meeting following a proposal from the board of directors. The board of directors may be granted authority by the general meeting to adopt share capital increases on specific terms. Such authorization may not be valid for more than 2 years and must be limited to a maximum of 1/2 of the share capital as of the date the authorization was granted.

Partnerships with liability

Capitalization of a partnership is adopted by the partnership meeting.

Philippines

Generally not applicable.

Exception is a subsidiary where such increase requires approval by majority vote of the board of directors and shareholders representing 2/3 of the outstanding capital stock. Articles of incorporation must be amended and filed with the SEC.

Poland

Applies only to limited liability companies, joint-stock companies and limited joint-stock partnerships because only these entities have share capital. An increase in share capital may be decided upon by means of a resolution of the shareholders' meeting or the general meeting. In case of limited joint-stock partnerships, all the general partners must consent to such an increase.

Portugal

Companies must keep an equity amount of at least 1/2 of its share capital. Should a company’s equity reaches below this level, the shareholders need to resolve on (i) dissolution of the company; (ii) share capital decrease; or (iii) capital contributions by the shareholders.

Puerto Rico

Corporations

Permitted. A corporation may amend its certificate of incorporation to increase its authorized capital stock.

Limited Liability Companies

Permitted. An LLC may amend its operating agreement to reflect an increase in capitalization.

Romania

The share capital may be increased by issue of new shares or increase of the share's nominal value. New shares may be issued in exchange for contribution in cash or in kind by incorporating the company's reserves (if possible) or by offsetting certain receivables.

Russia

Joint-stock company (public and non-public)

The charter capital of a company may be increased by increasing the nominal value of its shares or by issuing additional shares.

The decision to increase the charter capital of a company by increasing the nominal value of shares must be taken by a general shareholders' meeting.

The decision to increase the charter capital of a company by issuing additional shares must be taken by a general shareholders' meeting or the board of directors of a company if such resolutions are within its competence in accordance with the charter of the company.

Limited liability company

The charter capital of a company may be increased by means of the company’s assets and/or by means of additional contributions by its members, unless it is prohibited by the company’s charter, through the contributions of third entities/persons to be accepted into the company. The resolution on increase of the charter capital shall be made by a general members' meeting.

Saudi Arabia

Limited liability company

Effectuated by amending the Articles of Association and the SAGIA license. A unanimous consent of shareholders is required.

Singapore

Limited liability company

Share capital can be increased any time after incorporation.

South Africa

Not applicable for this jurisdiction.

South Korea

Joint-stock company (Jusik Hoesa)

Permitted without amendment of AOI if increase is within the amount of authorized capital stipulated in the AOI; if in excess of authorized capital, amendment of AOI is required which requires a special resolution of the general meeting of shareholders (see Quorum Requirements for Shareholder and Board Meetings for quorum requirements for a special resolution). In both cases, unless the company’s AOI designate the general meeting of shareholders as having the authority of authorization, authorization of board of directors and court registration is required.

Limited company (Yuhan Hoesa)

Effectuated by amending AOI which requires special resolution of the general meeting of members (see Quorum Requirements for Shareholder and Board Meetings for quorum requirements for a special resolution); court registration is required.

Spain

Branch (Sucursal)

Not applicable (branches do not have capital, albeit funds can be allocated to a branch). Further funds may, however, be allocated to a branch.

Limited liability company (Sociedad Limitada)

Requires a resolution from shareholders general meeting.

Joint-stock company (Sociedad Anónima)

Requires a resolution from shareholders general meeting.

Sweden

Limited company (aktiebolag, AB)

Generally, through issuance of new shares, warrants or convertibles or bonus issue with or without issuance of new shares, which requires a shareholders' resolution and registration with the SCRO. A board of directors may also resolve to issue new shares with the authorization granted by a shareholders' meeting,

Trading partnership (handelsbolag, HB)

A partner is not obliged to increase their contribution to the HB unless otherwise agreed upon in the partnership agreement.

Limited partnership (kommanditbolag, KB)

A partner is not obliged to increase their contribution to the KB unless otherwise agreed upon in the partnership agreement.

Branch office (filial, Branch)

Not applicable for this jurisdiction.

Switzerland

Stock corporation

Effectuated by share capital increase (ordinary, authorized or conditional) to be reflected in articles of association, which requires a resolution or authorization from the general meeting of shareholders.

Taiwan, China

Company limited by shares

An increase in the company's authorized capital will result in a Capital Tax of NTD1 for every NTD4,000 increase.

Closely-held company limited by shares

An increase in the company's authorized capital will result in a Capital Tax of NTD1 for every NTD4,000 increase.

Limited company

An increase in the company's capital contributions will result in a Capital Tax of NTD1 for every NTD4,000 increase.

Branch office of a foreign company

Not applicable for this jurisdiction.

Thailand

Not applicable for this jurisdiction.

Turkey

Companies may decide to increase their capital by way of in cash or in kind contributions. The following is required to increase capital:

  • In order to realize capital increase, current committed capital must be paid
  • A report prepared by a certified public accountant stating the current committed capital is paid
  • Company shareholders resolution for capital increase and
  • Registration of capital increase in the relevant Trade Registry.

Ukraine

Limited Liability Company

Generally permitted. Charter capital can be increased in case the current charter capital is paid in full. Increase is possible in 2 ways:

  • By means of additional contributions of participants or
  • Without additional contributions by means of undistributed profit of the company.

Additional contribution can be either in monetary or non-monetary form.

It is not allowed to increase charter capital if a company owns its own participation interest.

Charter capital may be increased by way of adopting a respective decision by 3/4 of the votes of all participants of the company who have the right to vote on relevant issues unless a different amount of votes is established by the charter itself, but no less than majority of votes.

Private Joint-Stock Company

Generally permitted. Charter capital can be increased in case all existing shares are paid in full. Increase is possible as follows:

  • By means of additional issue of shares of the same par value or
  • By means of increasing of par value of the existing shares.

Additional contribution can be either in monetary or non-monetary form. It is not allowed to increase charter capital if company owns its own shares.

Charter capital may be increased with the approval of shareholders holding at least 75 percent of the voting rights of the company.

United Arab Emirates

LLC

Technically, approval of partners representing 75 percent of the capital is required, unless the LLC's memorandum provides for an additional numerical majority of partners. In practice, unanimous approval of LLC's partners is required by the DED.

Branch

Not applicable for this jurisdiction.

FZ-LLC

Authorization by an ordinary resolution and by the FZ-LLC's memorandum and articles of association required.

FZ-Branch

Not applicable for this jurisdiction.

Dual Licence Branch

Not applicable for this jurisdiction.

United Kingdom

Private limited company

Generally permitted. For companies with only 1 class of share, further shares may be allotted by the board of directors (if permitted by the articles). Alternatively, and in any other case, allotment of further shares requires the approval of a majority of the shareholders. Capital contributions are not formally recognized under UK law.

Raising capital from the public is prohibited.

Limited liability partnership (LLP)

Requirements governed by LLP Agreement.

Registered UK establishment

Not applicable for this jurisdiction.

United States

An increase in authorized capital may be effectuated by amending the charter, which generally requires authorization from the Board and at least of a majority of the shareholders.

Vietnam

In order to increase the charter capital of a foreign-owned company, the company is required to register the amending of its IRC and ERC to record the new amount of charter capital, together with the internal amending of the charter of the company.