Companies Act 19,550 · Article 299 — Permanent state oversight

Companies under permanent state oversight (art. 299 LGS)

Article 299 of the General Companies Law lists the corporations that fall under permanent state oversight by the controlling authority (in the City of Buenos Aires, the IGJ, the corporate registry), throughout their operation, dissolution and liquidation: those that make public offerings, those with capital above the amount set by the Executive Branch, those with state participation, single-shareholder companies, among others.

Source: Act 19,550

What article 299

Article 299 defines the universe of companies subject to permanent state oversight: those which, by their size, activity or structure, remain under the agency's control throughout their entire life.

Official text · Act 19,550, art. 299

Corporations, in addition to the control of incorporation, are subject to oversight by the controlling authority of their domicile, throughout their operation, dissolution and liquidation, in any of the following cases:

1) They make a public offering of their shares or debentures;

2) They have share capital above the amount set by the Executive Branch (periodically adjustable);

3) They have state participation (national State, provinces, the Autonomous City of Buenos Aires, municipalities or authorized state agencies);

4) They carry out capitalization or savings operations, or in any form solicit money or securities from the public with promises of future benefits or performance;

5) They operate public concessions or public services;

6) They are a company controlling or controlled by another subject to oversight under one of the preceding items;

7) They are Single-Shareholder Corporations.

Source: Law 19,550, art. 299 — InfoLEG (updated official text)

Commentary

Falling within article 299 has concrete consequences: a board of at least three members (art. 255), a mandatory collegiate statutory audit committee (art. 284) and permanent control by the agency. That is why it matters whether the company qualifies or not.

Item 2 (high capital) is defined by an amount that the Executive Branch adjusts periodically; it is advisable to check the threshold in force under the latest applicable resolution, because whether many companies enter or leave the regime depends on it. The inclusion of single-shareholder corporations (item 7) by the 2015 reform was especially significant.

Distinctions often confused

Control of incorporation is not the same as Permanent oversight (art. 299). Every corporation undergoes the control of incorporation; only those of art. 299 are additionally under state oversight throughout their operation.

Corporation under art. 299 is not the same as Ordinary corporation. The art. 299 corporation requires a board of at least three members and a collegiate statutory audit committee; the ordinary one may have a single-member board and waive the statutory audit.

Practical impact

Before incorporating or when increasing capital, it is advisable to assess whether the company will fall under art. 299: it entails more bodies, higher costs and permanent control. The capital threshold of item 2 is adjusted, so the amount in force must be checked.

Frequently asked questions

Which companies are under permanent state oversight?

Corporations that make a public offering, those with capital above the amount set by the Executive Branch, those with state participation, those that gather public savings, those operating public concessions or services, those controlling or controlled by another supervised company, and single-shareholder corporations.

What does falling within art. 299 entail?

A board of at least three members, a mandatory collegiate statutory audit committee and permanent control by the controlling authority throughout the company's operation.

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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