Companies Act 19,550 · Article 255 — Board of directors: composition

The board of directors of the corporation: composition (art. 255 LGS)

Article 255 of the General Companies Law places the management of the corporation in the hands of a board of directors made up of one or more directors, appointed by the shareholders' meeting or the supervisory council. In companies subject to permanent state oversight (art. 299), except for single-shareholder companies, the board must have at least three directors.

Source: Act 19,550

What article 255

Article 255 governs the composition of the board of directors: who appoints the directors, how many there may be, and the minimum of three in companies covered by article 299.

Official text · Act 19,550, art. 255

Management is entrusted to a board of directors composed of one or more directors appointed by the shareholders' meeting or, as the case may be, the supervisory council.

In corporations covered by article 299, except those set out in subsection 7), the board of directors shall be composed of at least three directors.

If the shareholders' meeting is authorized to determine the number of directors, the bylaws shall specify the permitted minimum and maximum number.

Source: Law 19,550, art. 255 — InfoLEG (updated official text)

Commentary

The board of directors is the management body of the corporation. It may consist of a single director in an ordinary company, but companies covered by article 299 (permanent state oversight) require a collegiate board of at least three members, except for the single-shareholder corporation (subsection 7).

The bylaws may fix an exact number or delegate the determination to the meeting within a minimum and maximum. Appointing directors falls within the powers of the ordinary meeting (art. 234) or the supervisory council, and their acceptance and registration make the position enforceable against third parties.

Distinctions often confused

Ordinary corporation is not the same as Corporation under art. 299. The ordinary corporation may have a single-director board; those under art. 299 (except the single-shareholder one) require at least three directors.

Board of directors is not the same as Shareholders' meeting. The board manages and executes; the meeting is the governing body that appoints directors and approves their performance.

Practical impact

When drafting the bylaws, the number of directors and whether it is delegated to the meeting should be carefully defined. Companies that fall under article 299 must adjust the board to the minimum of three.

Frequently asked questions

How many directors must a corporation have?

One or more in an ordinary company. In companies covered by article 299 (permanent state oversight), at least three, except for the single-shareholder corporation.

Who appoints the directors?

The shareholders' meeting or, as the case may be, the supervisory council.

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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