Judgment against the company: enforcement against members (LGS art. 56)
Article 56 of the General Companies Law provides that a judgment against the company has res judicata effect against its shareholders or members as regards their liability for company obligations and may be enforced against them after exhaustion of the company's assets.
What article 56
Article 56 establishes the effect of a judgment against the company on its members and the requirement to first exhaust company assets.
A judgment rendered against the company has the force of res judicata against the shareholders or members with respect to their liability for company obligations and may be enforced against them, after prior exhaustion of the company's assets, as applicable according to the type of company concerned.
Source: Law 19,550, art. 56 - InfoLEG (updated official text)
Commentary
The provision structures subsidiary liability: enforcement is first directed against the company and its assets, and only thereafter—depending on the company type—against members who are liable for company debts. It is particularly important in partnership-type companies; in an SRL and S.A., a member's or shareholder's liability is generally limited to the contribution.
Do you need advice on this matter?
The firm is headquartered in Buenos Aires, Argentina, and advises clients worldwide.
Contact the firm