Companies Act 19,550 · Article 189 — Capitalization of reserves: proportionality
Capitalization of reserves: proportionality (art. 189 LGS)
Article 189 protects each shareholder’s proportion in capitalization of reserves and similar transactions.
What article 189
Article 189 protects each shareholder’s proportion in capitalization of reserves and similar transactions.
Official text · Act 19,550, art. 189
Each shareholder’s proportion must be respected when reserves and other special balance-sheet funds are capitalized, dividends are paid in shares, or similar procedures result in fully paid shares being delivered.
Source: Law 19,550, art. 189 — InfoLEG (updated official text)
Commentary
The rule prevents dilution when shares are distributed through capitalization of reserves or stock dividends.
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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