Issue below par and at a premium (art. 202 LGS)
An issue below nominal value is void except for the statutory exception; an issue at a premium is permitted and the premium is set by the shareholders’ meeting.
What article 202
Article 202 prohibits issues below par and governs issues at a premium.
An issue of shares below par is void, except in the case provided by Law No. 19,060. Shares may be issued at a premium, set by the extraordinary meeting while preserving equality within each issue. In companies authorized for public offerings, the decision is taken by the ordinary meeting, which may delegate setting the premium to the board.
Source: Law 19,550, art. 202 — InfoLEG (updated official text)
Commentary
The prohibition prevents new shareholders from entering below nominal value. A premium, by contrast, can align issue price with economic value and protect existing shareholders.
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