Treasury shares: disposal and suspension (art. 221 LGS)
The board must dispose of them within one year unless the meeting grants an extension, respecting pre-emption; until disposal, their rights are suspended and they do not count for quorum or majority.
What article 221
Article 221 governs disposal of acquired treasury shares and suspension of their rights.
The board shall dispose of shares acquired under items 2 and 3 of the preceding article within one (1) year, unless the shareholders’ meeting grants an extension, subject to the preferential right under Article 194. Rights corresponding to such shares shall remain suspended until disposal; they shall not be counted for quorum or majority.
Source: Law 19,550, art. 221 — InfoLEG (updated official text)
Commentary
A company cannot vote with itself or receive dividends on its own shares. Timely disposal and shareholder pre-emption restore normal circulation.
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