How long a director holds office (art. 257 LGS)

Article 257 of the General Companies Law limits the director's term: the bylaws set the term, which may not exceed three fiscal years. Nonetheless, the director remains in office until replaced. If the bylaws are silent, the maximum of three fiscal years applies.

What article 257

Article 257 sets the maximum term of the director and their holdover in office until replacement.

Source: Law 19,550, art. 257 — InfoLEG (updated official text)

Commentary

The three-fiscal-year cap ensures periodic renewal of the board and oversight by the meeting. The director is eligible for re-election (art. 256), so they may continue, but their term must be renewed.

The rule of remaining in office until replaced prevents a management vacuum: even after the term expires, the director stays in office until the meeting appoints a successor. And if the bylaws set no term, the maximum of three fiscal years automatically applies.

Distinctions often confused

Practical impact

The board should be renewed on time; a director whose term has expired continues to be liable while remaining in office. Registering the replacement (art. 60) ends their liability toward third parties.

Frequently asked questions