Corporate case law

Inspección General de Justicia c/ Fracchia Raymond S.R.L. (National Commercial Court of Appeals, Chamber E, 03/05/2005)

Whether the formal presence of more than one member was sufficient to form an SRL where one person held virtually all of the capital. The court upheld the registry’s refusal in the face of a merely apparent plurality of members. Under the legal regime then in force, the precedent held that plurality had to be substantive and that the corporate form could not be used as a mere façade to obtain limited individual liability.

CNCom., Sala E03/05/2005

Case caption

«Inspección General de Justicia c/ Fracchia Raymond S.R.L.»

What was at issue

Whether the formal presence of more than one member was sufficient to form an SRL where one person held virtually all of the capital.

What was decided

The court upheld the registry’s refusal in the face of a merely apparent plurality of members. Under the legal regime then in force, the precedent held that plurality had to be substantive and that the corporate form could not be used as a mere façade to obtain limited individual liability.

Extractable criterion

The court upheld the registry’s refusal in the face of a merely apparent plurality of members. Under the legal regime then in force, the precedent held that plurality had to be substantive and that the corporate form could not be used as a mere façade to obtain limited individual liability.
The holding should be read in light of the legal interest protected in the area of legal personality and formation, not solely by reference to the documentary form of the act.
Evidence of the specific facts and of their impact on corporate or creditor rights is decisive when applying the precedent’s doctrine to another case.

Citation: CNCom., Sala E, «Inspección General de Justicia c/ Fracchia Raymond S.R.L.», 03/05/2005 — Jurisprudencia societaria y comercial

Practical application

It remains a key precedent for the study of sham corporate arrangements and registry review, although today it must be read together with the statutory recognition of the single-member corporation.

Frequently asked questions

What is the main takeaway from the case?

Does the rule apply automatically today?

No. The current statutory framework and the specific facts must be verified. Historical precedents retain doctrinal value, but later reforms may alter how they apply.

What should be proven in similar litigation?

The relevant corporate or commercial documentation, the parties’ conduct, the specific harm, and the facts connecting that harm to the central issue in the case: Whether the formal presence of more than one member was sufficient to form an SRL where one person held virtually all of the capital.

Informational commentary on a published ruling; it does not constitute advice nor guarantee an outcome. Application to a case depends on its circumstances.

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