What may be contributed to a company (LGS art. 38)

Article 38 of the General Companies Law defines what may be contributed: contributions may consist of obligations to give or to perform, except for company types in which the law requires obligations to give. Performance must comply with the nature of the asset and, where transfer requires registration, a provisional registration is made in the name of the company under formation.

What article 38

Article 38 governs the subject matter of contributions and the manner in which they must be made, including provisional registration of registrable assets.

Source: Law 19,550, art. 38 - InfoLEG (updated official text)

Commentary

A contribution may be an obligation to give (money or property) or to perform (work or services), except in limited-liability forms such as the SRL and S.A., where capital must consist of obligations to give that are susceptible to compulsory enforcement. Each asset must be contributed in the form required by its nature, for example real estate by the appropriate deed.

Provisional registration in the name of the 'company under formation' solves a timing problem: while formation is pending the company is not yet registered, but it needs title to registrable assets contributed to it. The provisional entry bridges the period until final registration.

Distinctions often confused

Practical impact

When registrable assets are contributed, provisional registration in the name of the company under formation should be arranged. In an SRL and S.A., stated capital must be funded with assets subject to obligations to give; work or services should be structured as ancillary obligations.

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