Decree 70/2023, Chapter II of Title III “State Reform”
Transformation of state-owned companies into anonymous societies in Argentina
All state-owned companies, regardless of their current legal form, must be transformed into anonymous societies. This measure includes state-owned companies without a corporate legal form, state-owned enterprises, anonymous societies with majority state participation, mixed economy societies, and other organizations where the state has a stake in capital or corporate decisions but are not constituted as anonymous societies.
The transformed anonymous societies will be governed by the General Corporations Law No. 19,550 on equal terms as non-state-owned societies.
As a result, the text of Section 299, Subsection 3) of the aforementioned Law is amended to include cases in which there must be permanent state oversight of anonymous societies with state participation. In the previous wording, reference was made to mixed economy anonymous societies and societies in Section IV.
State-participating companies will not receive public law prerogatives or advantages in contracts or purchases, and a transition period of 180 days is established for the implementation of the transformation.
Lastly, Law No. 24,156 will only be applicable when, as a result of this transformation, the State holds majority shareholding in the anonymous societies.
OPINION:
The transformation of state-owned enterprises into anonymous societies aims to standardize their legal structure and subject them to the same regulations as private companies.
This could promote efficiency and equality in the business environment. However, it is crucial to ensure that this transition does not undermine the fulfillment of the social objectives and public interest that state-owned enterprises may have, and to note that this regulation will require corresponding implementation, which is expected to follow shortly.
The measure also underscores the importance of transparency and equality in commercial relationships with the State, avoiding unfair advantages in contracts and purchases.
Title XIV “General Corporations Law”
The Executive Decree (DNU) introduces changes to two Sections of the General Corporations Law No. 19,550 and its amendments.
In Section 30, it allows civil associations and non-profit entities to become part of anonymous societies as the only permitted corporate form, and furthermore, they can participate in any associative contract.
Also, there is a modification to Subsection 1 of Section 77 within the regulations governing corporate transformation. In it, the unanimous agreement of the partners remains a requirement for the transformation of commercial societies, and a new requirement is introduced for the transformation of a civil association into a commercial society or for participating in an anonymous society, which is the need for a two-thirds vote of the associates. The authorization for the participation of civil associations and non-profit entities, such as foundations, in anonymous societies is highly innovative in our country. This expands the options for these entities in terms of business collaboration.