Companies Act 19,550 · Article 25 — Cure

Curing a Section IV company (LGS art. 25)

Section 25 of the General Companies Law permits cure of Section IV companies: omissions of requirements (whether form-defining or not), elements incompatible with the chosen form, or failure to comply with formalities may be remedied at the initiative of the company or its members at any time during the agreed term. If unanimous agreement is lacking, a court may order the cure.

Source: Act 19,550

What article 25

Section 25 governs cure (regularization) of Section IV companies and dissolution at a member's request where no term has been agreed.

Official text · Act 19,550, art. 25

In the case of companies included in this Section, the omission of essential requirements, whether or not defining the company form, the existence of elements incompatible with the chosen form, or the failure to comply with formal requirements may be cured at the initiative of the company or the members at any time during the term provided in the agreement. In the absence of unanimous agreement among the members, cure may be ordered by a court in a highly expedited proceeding. Where necessary, the court may supply the lack of agreement, without imposing greater liability on members who do not consent. A dissenting member may exercise the right of withdrawal within ten (10) days after the judicial decision becomes final, under article 92.

Dissolution. Liquidation. Any member may cause the dissolution of the company where there is no written provision fixing its term, by giving reliable notice of that decision to all members. The dissolution shall take effect by operation of law among the members ninety (90) days after the last notice. Members wishing to remain in the company shall pay the departing members the value of their interests.

Source: Law 19,550, art. 25 - InfoLEG (updated official text)

Commentary

Cure is the route by which an informal Section IV company can obtain the legal certainty of a duly formed statutory company: missing requirements or formalities are completed. It may be initiated by the company or any member; if unanimous consent is lacking, the court may order it - even supplying the missing agreement - through a highly expedited procedure.

The counterpart is easy dissolution where no term has been agreed: any member may cause dissolution by notifying the others, effective after 90 days. Those wishing to continue must pay out the departing members. This strongly encourages formalization and the inclusion of an agreed term.

Distinctions often confused

Cure is not the same as Dissolution. Cure regularizes and preserves the company; dissolution (available where no term has been agreed) brings it to an end at a member's request.

Practical impact

Any de facto company should consider cure to obtain the certainty of a statutory company form. Without an agreed term the company is vulnerable: any member may dissolve it by notice.

Frequently asked questions

How is a de facto company regularized?

Through the cure procedure in article 25: the missing requirements, company form or formalities are completed by agreement of the members or, failing agreement, by court order.

If we did not agree on a term, can any member dissolve the company?

Yes. A member may cause dissolution by giving reliable notice to all members, effective 90 days after the last notice.

This page is informational and does not constitute legal advice nor replace professional consultation. It quotes the official text of the rule; for its application to a specific case, consult a licensed professional.

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