Challenging shareholder meetings and corporate resolutions

The shareholder meeting approved a resolution that harms your interests or those of the company, and you believe the law, the bylaws or the corporate interest were violated. The window to react is short and demands precise action.

When a shareholder resolution can be challenged

Article 251 of General Companies Law 19,550 allows any shareholder-meeting resolution adopted in violation of the law, the bylaws or internal regulations to be challenged. Standing belongs to shareholders who did not vote in favor, absent shareholders who prove their status, those who voted in favor if their vote is voidable due to a defect of consent, and also directors, statutory auditors and the regulatory authority.

The challenge may address formal defects — a defective call, lack of quorum, omission of an agenda item — or substantive defects, such as resolutions that harm the corporate interest or unduly benefit a group of shareholders. Each scenario requires a different evidentiary strategy.

Deadlines and interim measures

The action must be brought within three months of the closing of the meeting, under article 251. This is a short limitation period, which makes an early assessment of the case decisive.

Article 252 allows a request for the preventive suspension of the enforcement of the challenged resolution, where there are serious grounds and no harm to third parties, upon posting security for any resulting damages. This measure is often key to preventing the challenged decision from taking full effect while the case is pending.

How we handle the case

We review the minutes, the notice of meeting, the agenda and the supporting documentation to identify the available defects and how solid they are. We assess standing, the time remaining, and whether an interim measure is advisable.

We design a strategy that integrates the court proceeding with any potential negotiations, always seeking to preserve the value of the company and the client's position.

Common mistakes

• Letting the three-month period under article 251 lapse and losing the action due to time-bar
• Voting in favor without recording an objection or reservation
• Failing to request suspension of the decision while it is being carried out
• Confusing a business disagreement with a challengeable defect
• Filing a challenge without gathering the documentary evidence to support it

Frequently asked questions