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.