Companies Act 19,550 · Article 186 — Capital: subscription and minimum amount

Capital: subscription and minimum amount (art. 186 LGS)

Capital must be fully subscribed upon formation and may not be below the statutory minimum, which may be updated by the Executive. The article also governs subscription contracts and requires full payment in an S.A.U.

Source: Act 19,550

What article 186

Article 186 requires full subscription at formation, sets the minimum capital and specifies the subscription contract for capital increases.

Official text · Act 19,550, art. 186

The capital must be fully subscribed when the constitutive instrument is executed. It may not be less than THIRTY MILLION PESOS ($30,000,000). This amount may be updated by the Executive Branch whenever deemed necessary.

Terminology. In this Section, “company capital” and “subscribed capital” are used interchangeably.

Subscription contract. For capital increases by subscription, the contract shall be executed in duplicate and contain: 1) identifying information of the subscriber, individual or legal entity; 2) number, par value, class and characteristics of subscribed shares; 3) price per share and total subscribed, and form and conditions of payment. In single-shareholder stock corporations capital must be fully paid; 4) contributions in kind shall be precisely identified.

Source: Law 19,550, art. 186 — InfoLEG (updated official text)

Commentary

Subscription means undertaking the contribution; payment means actually contributing. Capital must be fully subscribed at formation, while minimum cash payment is governed by Article 187.

The statutory minimum may be updated by the Executive. For increases, the subscription contract records the subscriber, shares, price, payment and contributions in kind.

Distinctions often confused

Subscribe capital is not the same as Pay in capital. Subscription is the undertaking to contribute; payment is actual performance of that obligation.

Multi-shareholder S.A. is not the same as Single-shareholder S.A.U.. The S.A.U. must fully pay capital at formation; the multi-shareholder S.A. may use the statutory minimum cash-payment rule.

Practical impact

Before forming or increasing a stock corporation’s capital, the current minimum should be checked and subscription and payment carefully documented, especially for contributions in kind.

Frequently asked questions

What is the minimum capital of a stock corporation?

The amount stated in Article 186 as updated by the Executive; the current figure should be verified.

Must all capital be paid at formation?

All capital must be subscribed. A multi-shareholder S.A. may use the statutory minimum cash payment; an S.A.U. must fully pay capital.

This page is informational and does not constitute legal advice nor replace professional consultation. It quotes the official text of the rule; for its application to a specific case, consult a licensed professional.

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