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The Superintendence of Corporations eases certain requirements for holding remote corporate meetings

As anticipated in our newsletter published last March 25^th, the Superintendence of Corporations (the “Superintendence”) published today in the Official Gazette General Resolution No. 11/2020 (“Resolution 11/2020”), by means of which it introduced lower requirements regarding remote corporate meetings, as a consequence of the social, preventive and compulsory quarantine imposed by the Executive Branch through Decree No. 297/2020 (published on 03/19/20).

Resolution 11/2020 amends Section 84 of General Resolution 7/2015, and includes the possibility of holding remote corporate meetings, for both management (e.g., boards) and governing bodies (previously, only meetings of the management bodies were allowed to be held remotely). In this same sense, the requirement to fulfill quorums with the physical presence of the majority of the members at the meeting venue was also suppressed, and it can also be met remotely.

Additionally, and although the by-laws should provide with the necessary mechanisms for holding remote meetings of the corporate bodies, it was provided that while the quarantine lasts as a consequence of the state of health emergency, companies and non-profit organizations may hold the meetings of their administrative and governing bodies remotely even if their by-laws do not include an express provision on this matter.

In any case, all meetings to be held remotely -during the quarantine or not-, must comply with all the following procedures:

1. full access for all participants of the meetings;
2. the possibility of participating through a platform that allows simultaneous transmission of both audio and video;
3. to allow the participation with voice and vote for all the members and of the syndic, if applicable;
4. meetings must be digitally recorded;
5. the legal representative shall keep a digital record for a period of five (5) years, and shall make it available upon request of any shareholder;
6. the meeting shall be transcribed to the corresponding book, indicating the participants, and shall be signed by the legal representative; and
7. when summoning any meeting, the digital platform to be used must be specified in detail.

Finally, it should be noted that -concurrently with the provisions for other type of corporations- the requirements and possibility to hold remote meetings was also authorized for non-profit organizations (Asociaciones Civiles).

Should you require additional advice regarding the different alternatives to carry out remote meetings, do not hesitate to contact Juan Pablo Bove, Federico Otero, Julián Razumny, Pablo Tarantino, or Agustín Griffi, or corporate@trsym.com.

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COVID-19 – Restriction to public utilities’ interruptions and LPG price caps

On March 25^th, 2020, Decree No. 311/2020 (the “Decree”) was published in the Official Gazzete, which has imposed certain restrictions over public utility operators’ ability to interrupt the supply of services such as electricity supply, gas, running water and sewage, fixed or mobile telephone and internet, and cable television, linked by satellite or radio-electricity, to certain users (which are further detailed below), in case of delay or lack of payments up to (3) consecutive or alternated invoices with due dates since March 1^st, 2020. In turn, the Decree has enforced price caps for liquefied petroleum gas (LPG) by fixing prices for 180-days.

The Decree is framed within Emergency Decree No. 297/2020, which has declared social, preventive and compulsory isolation for citizens and inhabitants of Argentina since March 20, 2020) due to the breakout of COVID-2019.

1. Scope of the Decree

The Decree foresees that companies which provide services involving electrical power supply, gas, running water and sewage, mobile or fixed telephony and internet, and cable television, whether linked by satellite or radio-electricity, are refrained from interrupting the aforementioned services based on lack or non-timely payments of up to (3) consecutive or alternated invoices, with due dates starting on March 1^st, 2020. This obligation will be maintained for 180 running days counting from the Decree’s effective date (term that would elapse on September 25^th, 2020).

Companies that provide the previously mentioned services are bound to provide payment facilities for users which fail to make timely payments, in accordance to the rules to be enacted by the regulatory authority.

2. Parties included

The Decree establishes that the measures referred to in the previous subheading will apply for the following residential and non-residential users:

(i) Universal Income by Son (AUH) and Pregnancy Income beneficiaries.

(ii) Non-contributive pension owners that perceive monthly gross income which does not exceed (2) times the minimum wage.

(iii) Users registered in the Mono-tax Social Regime.

(iv) Retirees and pensioners, and workers in relationship of dependence who perceive a gross salary equal or less to (2) times the minimum wage.

(v) Mono-tax workers registered in a category whose annual income turned into months do not exceed in (2) times the minimum wage.

(vi) Users who perceive an employment insurance.

(vii) Electro-dependents, beneficiaries of Law No. 27,351.

(viii) Users incorporated to the Social Security Special Regime for Particular Households Employees (Law No. 26,844).

(ix) Users exempted of paying the Lightning, Sweeping and Cleaning (ABL) service, or local taxes of the same nature.

(x) Micro, Small and Medium Size Companies (MiPyMES) in accordance with Law No. 25,300;

(xi) Working Cooperatives or Recovered Companies registered in the National Institute of Associativism and Social Economy (INAES) affected during the emergency, depending on the regulatory rules;

(xii) public or private health institutions affected during the emergency;

(xiii) the Public Welfare Entities which either produce or distribute food.

3. LPG price cap

Furthermore, the Decree has set forth LPG price caps by fixing LPG price cap for the local markets for a 180-day term.

4. Enforcement authority and invitation to adhere

Finally, the Decree appoints the Ministry of Productive Development as enforcement authority, which in turn is entrusted to issue complementary rules of the Decree; and invites the Provinces and the Autonomous City of Buenos Aires to adhere to the terms of the Decree.

For further information, please contact Nicolás Eliaschev and/or Javier Constanzó.

***

In the following link, you can access The Firm’s statement on Coronavirus.

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Remote Corporate Meetings

Due to the social, preventive and compulsory quarantine imposed by the Executive Branch through Decree No. 297/2020 (published on 03/19/20), it is of particular interest to consider the alternatives by which companies may hold their corporate meetings during this extraordinary situation.

Civil and Commercial Code

Companies often include special provisions in their by-laws to allow remote meetings of their different bodies. Hence, the provisions set forth in the by-laws of each company should first be reviewed in order to determine if such meetings can be held. According to Section 158 of the Civil and Commercial Code ("CCC"), members of a company can determine special provisions on this matter. Notwithstanding the foregoing, and in the absence of any by-laws regulations, the CCC provides that in order to hold remote partners’ meetings:

1. all participants must consent the use of such means allowing simultaneous communication among themselves;
2. the corresponding minutes must be signed by the chairman together with another member of the board or corresponding corporate body; and
3. the minutes shall duly note the remote method adopted for the meeting.

Although Section 158 of the CCC only regulates meetings of corporate governing bodies (e.g., shareholders’ meetings), it is inferred that the rule also applies to meetings of other corporate bodies (e.g., board of directors, managers).

Provisions of the Superintendence of Corporations

Conversely, for those companies registered in the Autonomous City of Buenos Aires, Section 84 of the General Resolution of the Superintendence of Corporations No. 7/2015 established a more restrictive standard than the one provided by the CCC. The Superintendence established that by-laws must expressly grant faculties to the management body to hold remote meetings, while expressly forbade remote shareholders’ meetings. In this regard, requirements to hold remote meetings are as follows:

1. in all cases, quorum must be fulfilled by the physical presence of the majority of members required at the venue previously established;
2. the by-laws must guarantee the security of the meetings and the access for all members of said body (these requirements can be met with the presence of a syndic or a notary public at the venue, although in the past, the Superintendence has not objected acts in which these officials had not participated); and
3. the corresponding minutes must be signed by the participants.

Note that, considering the prevailing circumstances due to the COVID-19 pandemic, alternative measures could be evaluated if companies are prevented from complying with said requirements if their by-laws do not provide for meeting to be held remotely.

Companies Admitted to the Public Offering Regime

In relation with companies in which the Securities Exchange Commission (“CNV”) performs duties of registral supervision -both admitted in the public offering regime and domiciled in jurisdictions that delegate said faculty to the CNV (Autonomous City of Buenos Aires, Tucumán, Mendoza, Tierra del Fuego, and Chubut)-, Section 61 of Law No. 26,831 (Capital Markets Law) provides that, to hold board meetings remotely:

1. issuer's by-laws must include a specific provision on this matter;
2. the quorum will only be considered with members physically present, unless by-laws establish for a different provision;
3. meetings’ minutes must be signed within the following five (5) business days of the meeting, by the members physically present and the representative of the Supervisory Committee (Comisión Fiscalizadora).

Law No. 26,831 also establishes that the by-laws of an issuer may provide for shareholder’s meetings to be remotely held.

It is worth noting that prior to the Decree that imposed the quarantine, the Comission ordered that issuers resolving to hold such meetings (as a result of the sanitary measures then in place), would be granted, exceptionally, an extension for the holding their annual ordinary meetings (which should be held within 4 months as of the closing of the financial year).

In this respect, issuers must communicate any impediments to the Commission and file the request for an extension in a well-founded manner, so that it is immediately merited for definition. For those issuers that would still carry on with their meetings, the Commission requested that the parameters recommended by the Ministry of Health be taken into special consideration and that all preventive measures be arbitrated to avoid the spread of the virus. Likewise, the Commission recommended stimulating as much as possible the attendance of shareholders’ at the meeting by proxy, to minimize the number of attendees.

Given that the measure was adopted by the Commission prior to the mandatory quarantine, a new resolution is expected to confirm whether or not an extension is granted to hold the shareholders’ meeting, regardless of their characteristics or the possibility to hold them remotely.

Simplified Corporations

With respect to Simplified Corporations (sociedades por acciones simplificadas), Law No. 27,349 for the Support of the Entrepreneurial Capital, allows meetings of both the board and shareholders to be held remotely. The corresponding minutes shall be digitally signed by the legal representative.

Should you require additional advice regarding the different alternatives in order to carry out remote meetings, please do not hesitate to contact Juan Pablo Bove, Federico Salim, Julián Razumny, Julieta de Ruggiero, or Agustín Griffi, or corporate@trsym.com.

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