Companies Act 19,550 · Article 251 — Challenge to the shareholders' meeting decision

How to challenge a shareholders' meeting decision (art. 251 LGS)

Article 251 of the General Companies Law governs the challenge to shareholders' meeting decisions contrary to the law, the bylaws or the regulations. The decision may be challenged by shareholders who did not vote in favor, absent shareholders, directors, statutory auditors, the supervisory council and the control authority. The action is brought against the company within three months of the meeting's closing.

Source: Act 19,550

What article 251

Article 251 establishes the action to challenge shareholders' meeting decisions: who has standing to bring it, against whom it is directed and the time limit for doing so.

Official text · Act 19,550, art. 251

Any resolution of the meeting adopted in violation of the law, the bylaws or the regulations may be challenged for nullity by the shareholders who did not vote in favor of the respective decision and by absent shareholders who prove their status as shareholders as of the date of the challenged decision. Shareholders who voted in favor may challenge it if their vote is voidable due to a defect of will. Directors, statutory auditors, members of the supervisory council or the control authority may also challenge it.

Bringing the action. The action shall be brought against the company, before the court of its domicile, within three (3) months of the meeting's closing.

Source: Law 19,550, art. 251 — InfoLEG (updated official text)

Commentary

The challenge protects the legality of corporate decisions. Standing belongs to shareholders who voted against or abstained and to absent shareholders; exceptionally, to those who voted in favor if their vote was defective. Also to directors, statutory auditors and the control authority.

The three-month time limit from the meeting's closing is short and a limitation period: once it expires, the decision becomes final. That is why, faced with an irregular meeting, one must act quickly; a preventive suspension of the decision's execution may also be requested while the lawsuit is pending (art. 252).

Distinctions often confused

Challenge to the decision (art. 251) is not the same as Liability action (art. 274). The challenge attacks the validity of the shareholders' meeting decision; the liability action seeks compensation for damages caused by managers or directors.

Nullity of the decision is not the same as Nullity of the company. Article 251 annuls a specific resolution of the meeting; it does not affect the company's existence.

Practical impact

The three-month time limit is the critical point: the meeting's closing should be documented and the challenge, along with a possible precautionary suspension measure, should be assessed immediately. Letting the deadline lapse consolidates the decision.

Frequently asked questions

Who may challenge a shareholders' meeting decision?

Shareholders who did not vote in favor and absent shareholders who prove their status, those who voted in favor with a defective vote, and directors, statutory auditors, the supervisory council or the control authority.

What is the deadline for challenging?

Three months from the meeting's closing. It is a limitation period: once it expires, the decision becomes final.

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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