Companies Act 19,550 · Article 205 — Reduction for losses
Reduction for losses (art. 205 LGS)
The extraordinary meeting may reduce capital because of losses in order to restore the balance between stated capital and net assets.
What article 205
Article 205 governs capital reduction to absorb losses.
Official text · Act 19,550, art. 205
The extraordinary shareholders’ meeting may resolve to reduce capital because of losses suffered by the company in order to restore the balance between capital and company net assets.
Source: Law 19,550, art. 205 — InfoLEG (updated official text)
Commentary
When losses have consumed part of capital, the reduction aligns the nominal figure with the company’s financial reality and may form part of a restructuring followed by recapitalization.
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