Companies Act 19,550 · Article 259 — Resignation of directors

Resignation of a director: when it is accepted (art. 259 LGS)

Article 259 of the General Companies Law governs a director's resignation: the board must accept it at its first meeting held afterward, provided it does not affect the body's regular operation and is not made in bad faith or at an untimely moment. If it is, the resigning director must remain in office until the next meeting rules on the matter.

Source: Act 19,550

What article 259

Article 259 sets the regime for a director's resignation and its conditions.

Official text · Act 19,550, art. 259

The board must accept the director's resignation at the first meeting held after it is submitted, provided it does not affect the board's regular operation and is not made in bad faith or at an untimely moment, which must be recorded in the relevant minutes. Otherwise, the resigning director must remain in office until the next meeting rules on the matter.

Source: Law 19,550, art. 259 — InfoLEG (updated official text)

Commentary

Resignation cannot be used to leave the company headless or unprotected: if it affects the board's operation or is made in bad faith or at an untimely moment, the director is not released immediately and must continue until the meeting rules. This protects the company and third parties.

The acceptance (or its reasoned rejection) must be recorded in the minutes. In addition, for the resignation to be enforceable against third parties, the cessation must be registered (art. 60): a prudent director makes sure of both the acceptance and the registration.

Distinctions often confused

Acceptable resignation is not the same as Bad-faith or untimely resignation. The first is accepted at the first meeting; the second requires the director to remain in office until the meeting rules.

Practical impact

A resigning director should be careful about the timing and form (not untimely) and verify acceptance in the minutes and registration of the cessation; otherwise they may continue to be liable.

Frequently asked questions

Can a director resign at any time?

They may resign, but the board must accept it only if it does not affect regular operation and is not made in bad faith or at an untimely moment; if it is, the director must continue until the next meeting rules.

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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