Distribution of dividends and advances (art. 224 LGS)
Dividends and interest are lawful only from realized and liquid profits shown in duly prepared and approved annual accounts; advances are prohibited except for Article 299 companies.
What article 224
Article 224 governs lawful dividends and the prohibition on advance dividends.
Distribution of dividends or payment of interest to shareholders is lawful only if derived from realized and liquid profits corresponding to annual accounts duly prepared and approved. Advance or provisional dividends or dividends resulting from special balance sheets are prohibited, except in companies covered by Article 299.
Source: Law 19,550, art. 224 — InfoLEG (updated official text)
Commentary
The rule reinforces capital protection: fictitious wealth cannot be distributed. The Article 299 exception operates under permanent supervision.
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