The company as a legal subject (LGS art. 2)

Section 2 of the General Companies Law recognizes the company as a legal subject separate from its members, within the scope established by the Law itself. It has its own assets, name, domicile and capacity to acquire rights and assume obligations. That scope is not absolute: it gives way where the corporate form is abused (art. 54, inopposability/disregard).

What article 2

Section 2 establishes the company's legal personality: it is a center to which rights and obligations are attributed, separate from the persons who comprise it, within the scope recognized by law.

Source: Law 19,550, art. 2 - InfoLEG (updated official text)

Commentary

Being a legal subject means that the company has its own assets, separate from those of its members; it may own property, enter into contracts, sue and be sued. This is the basis of the separation of assets that makes the corporate form attractive.

The Law states that legal personality is recognized "within the scope established by this Law": it is not an absolute shield. When the company is used to violate the law, public policy or good faith, or to frustrate third-party rights, article 54 applies and the relevant conduct may be attributed to the members or controlling persons.

Distinctions often confused

Practical impact

The separation between the company and its members protects personal assets, but not without limit: abuse of the corporate form may trigger disregard of legal personality under article 54.

Frequently asked questions