BKM – Berkemeyer reports that since the entry into force of Law No. 5895/17, new rules have been introduced to provide transparency to the regime of companies constituted by shares and some rules of the Civil Code have been modified. Said legislation implies the disappearance of bearer shares, specifying by means of regulations, certain obligations that both companies and shareholders must comply with.
Prior to the effect of said law, although there were certain obligations that companies must comply with, they were not followed due to the lack of sanctions, which is why the application of heavy economic sanctions has been envisaged, with fines from 100 day’s minimum wages (Gs. 8,125,000) to 500 day’s minimum wages (Gs. 40,626,000), and even RUC (Unique Registry of Taxpayer) blocking.
Some of the non-compliances sanctioned by said regulations are the lack of formalization and registration of the regulatory actions in substitution of the bearer shares, lack of notification of assemblies made to the Treasury Department, failure to notify the transfer of shares from shareholders to the company or from the company to the Treasury Department, among other faults.
Due to various reasons, the application of sanctions was postponed through resolutions, the last being Resolution No. 150/18, through which the application of sanctions (fines) and non-sanctioning measures (RUC blocking and suspension of economic rights) were suspended until 17/02/2019. In this framework, fines will be applied as of 18/02/2019.
It should be clarified that through AT Resolution No. 01/2019, a schedule was set for the enactment of sanctions, fines and non-sanctioning measures, as detailed below:
| Schedule for the application of sanctions, fines and non-sanctioning measures | |
| RUC Ending | Application of sanctions as of: |
| 0 and 1 | 18Th of February 2019 |
| 2 and 3 | 18Th of March, 2019 |
| 4 and 5 | 18Th of April, 2019 |
| 6 and 7 | 18Th of May, 2019 |
| 8 and 9 | 17Th of June, 2019 |
As can be seen, to determine from what moment the sanctions will be applied the last number of the RUC (not the check number) of the company must be taken into account. In order to facilitate the understanding of said regulation, we present the following example:
| Business Name | RUC | Last Number of RUC | Application of sanctions as of: |
| Berkemeyer SA | 800150-8 | 0 | 18Th of February 2019 |
| If this firm did not comply with their corporate obligations, as of 18/02/2019 sanctions and non-sanctioning measures will be applied. | |||
| Berkemeyer SA | 800152-9 | 2 | 18/03/2019 |
| If the firm did not comply with their corporate obligations and the Treasury Department is informed of said breach on 27/02/2019, it will not be able to apply any sanction, since according to the schedule, sanctions can only be applied to this firm as of 18/03/2019. |
We emphasize the importance of drafting correctly corporate documents in order to avoid civil, tax, and other contingencies, so it is always advisable to have expert counsel in these areas of the law.
