SEPTEMBER 19, 2023.
On September 12, 2023, the United Commissions of Economy and Legislative Studies of the Senate approved, through roll-call vote, the draft for the decree by which several provisions of the General Law of Commercial Companies (“GLCC”) are amended regarding the rules for the celebration of partners meeting, forwarding it to the Federal Executive to continue with the final stages of the legislative process.
The amendment contained in the referred decree has been expected since the middle of the SARS-CoV-2 Pandemic, in December 2021, when deputy Ana Lilia Herrera Anzaldo presented the amendment initiative to the GLCC with the objective to allow the celebration of partners’ meetings through technologic means. Initially, the amendment was proposed due to the health emergency, however, the flexibility and ease offered by the digital assistance of the partners to the meeting, remains being a very attractive option for commercial companies even though the health emergency for SARS-CoV-2 is over. On the other hand, this amendment implies the adaptation of the GLCC to our time, which is involves technology.
Derived from the context of the SARS-CoV-2 Pandemic and the use of new technologies, the Legislative Authority developed a decree that amends articles 6, 75, 80, 81, 82, 143, 178, 179, 186 and 194 of the GLCC, which provides, in general terms, the changes that will be discussed below and that are related to the use of technological means in the partner’s meetings and in the meeting of the board of Limited Liability Companies (Sociedad de Responsabilidad Limitada) and Corporations (Sociedad Anónima).
Firstly, the amendment of articles 75 and 143 of the GLCC provides the possibility to carry out meetings of the board through electronic, optical or any other technological means, in a partial or total manner, allowing its members to assist to the meeting remotely, as long as such possibility is provided by the company’s by-laws.
On the other hand, articles 20, 82, 178 and 179 of the GLCC concerning shareholders’ meetings are also amended, respectively. The new text of the referred articles allows commercial companies to include the possibility to carry out shareholders’ meetings remotely through the use of electronic, optical or any other technological means in their by-laws, meeting that will have the same force and validity as a shareholder’s meeting gathered physically. Likewise, it is clarified that the celebration of shareholders’ meetings through electronic, optical or any other technological means do not imply that the meeting takes place outside of the corporate domicile, also, it allows shareholders’ meeting to take place outside of the corporate domicile as long as all of the shareholders agree and the company’s by-laws contain the possibility to carry out shareholders’ meeting through technological means, noting the domicile in which the meeting takes place in the corresponding meeting minute.
For the Limited Liability Company (Sociedad de Responsabilidad Limitada), the new text of article 81 of the GLCC, obliges these types of companies to publish their calls to partners’ meetings in the electronic system of the Ministry of Economy, obligation that previously existed only for Corporations (Sociedad Anónima) and is now also included for Limited Liability Companies (Sociedad de Responsabilidad Limitada).
Finally, and concerning corporations (Sociedad Anónima) exclusively, the amendment of articles 186 and 194 of the GLCC provide two new scenarios. The first of them, included in article 186, provides that the financial reports referred to in article 172 of the GLCC, which are made available to the shareholders before the meeting, may be made available to the shareholders through an electronic, optical or any other technological mean provided by the by-laws for such purposes, and not only in a physical manner at the company’s office. The second scenario included in article 194, provides expressly, the possibility to sign the corresponding shareholders’ meeting minute using an electronic signature. This addition to article 194 is convenient because there are no more doubts left regarding the possibility to sign shareholders’ meeting minutes with electronic signature, however, we consider that, by virtue of the provisions included in the Code of Commerce for electronic signatures, the use of electronic signatures in shareholders’ meeting minutes was allowed even though the GLCC didn’t allow it expressly.
The amendment decree draft provides that its effectiveness will begin the next day of its publication in the Federal Official Gazette, except for the provisions contained in the new text of article 81 of the GLCC, whose effectiveness will begin six months after its publication.
In conclusion, we considered that the amendment approved on September 12, turns out to be very convenient because it provides flexibility to the commercial company’s decision making and makes possible the assistance of all its members, which allows safety in decision making. In order for companies to take advantage of technology, we recommend having clear by-laws in respect to the type of technological mean that will be allowed in the shareholders’ meeting, as well as the requirements to the shareholders to access the meeting and other technical aspects of the corresponding technological mean. Finally, it is important to consider that the possibility to use electronic, optical or any other technological mean according to the GLCC, shall be provided in the company’s by-laws, so, once the amendment is published in the Federal Official Gazette (publication that will occur in the following days), we recommend companies that wish to use this tool to carry out an Extraordinary Shareholders’ Meeting to amend the company’s by-laws and include the use of technological means expressly