Representation of the private minority on the board of directors (art. 311 LGS)
Article 311 of the General Companies Law allows the private minority (20% of the capital) to appoint directors and statutory auditors in a corporation with state participation, and exempts it from the fee cap of art. 261.
What article 311
Article 311 governs the representation of the private minority and remuneration in the corporation with state participation.
The provisions of the second and following paragraphs of article 261 do not apply to the remuneration of the board of directors and the supervisory council. The bylaws may provide for the appointment by the minority of one or more directors and one or more statutory auditors when the shares of private capital reach twenty percent (20%) of the corporate capital.
Source: Law 19,550, art. 311 — InfoLEG (updated official text)
Commentary
It gives the private shareholders a voice vis-à-vis the majority State: with 20% they can appoint their own directors and statutory auditors. The fee cap of art. 261 does not apply, owing to the particularities of state management.
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