Capital increase up to fivefold (art. 188 LGS)
If authorized by the charter, a stock corporation may increase capital up to fivefold by shareholders’ resolution without new administrative approval. Public-offering companies may increase capital without that limit.
What article 188
Article 188 governs capital increases within five times the stated capital and the special regime for public-offering companies.
The charter may provide for an increase in company capital up to five times its amount. It shall be decided by the shareholders’ meeting without requiring new administrative approval. Without prejudice to Article 202, the meeting may delegate to the board only the time of issuance and the form and conditions of payment. The resolution shall be published and registered.
In stock corporations authorized to make public offerings of their shares, the meeting may increase capital without limit and without amending the charter. The board may carry out the issuance by delegation of the meeting, in one or more tranches, within two years from the meeting date.
Source: Law 19,550, art. 188 — InfoLEG (updated official text)
Commentary
The provision simplifies moderate increases: if the authorization is in the charter, an increase up to fivefold can proceed without charter amendment, subject to publication and registration.
The procedural simplification does not eliminate shareholders’ pre-emption rights. Public-offering companies enjoy an even more flexible regime with two-year delegation to the board.
Distinctions often confused
Practical impact
Including the fivefold authorization in the charter facilitates future capitalization. Publication, registration and pre-emption rights must still be respected.
Frequently asked questions
Can capital be increased without amending the charter?
Does this eliminate pre-emption rights?
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