Companies Act 19,550 · Article 74 — Transformation: concept

Company transformation: changing legal form (LGS art. 74)

Section 74 of the General Companies Law defines transformation: it occurs when a company adopts another statutory legal type. The company is not dissolved and its rights and obligations remain unchanged; it is the same legal entity in a different legal form (for example, an SRL transforming into an S.A.).

Source: Act 19,550

What article 74

Section 74 defines transformation and its essential effect: continuity of legal personality and assets.

Official text · Act 19,550, art. 74

Transformation occurs when a company adopts another of the statutory types. The company is not dissolved and its rights and obligations are not altered.

Source: Law 19,550, art. 74 - InfoLEG (updated official text)

Commentary

The key is continuity: the transformed company is the same legal person and retains its assets, contracts, history and registration; only the legal form changes. There is no transfer of assets and no new company.

Transformation is used, for example, when an SRL grows and needs the S.A. regime or when partners in a partnership seek limited liability. It requires a corporate resolution, special balance sheet and the requirements of the following sections and may trigger withdrawal rights for dissenting members.

Distinctions often confused

Transformation is not the same as Merger. Transformation changes the legal form of the same company, which continues to exist; a merger combines two or more companies, with the absorbed entities dissolving without liquidation.

Transformation is not the same as Formation of a new company. Transformation creates no new legal entity and transfers no assets; the same legal person continues under a different type.

Practical impact

Transformation avoids liquidation and reincorporation, preserving contracts, licences and history. The special balance sheet, required majorities and possible withdrawal rights must be addressed.

Frequently asked questions

Does transformation dissolve the company?

No. The company is not dissolved and its rights and obligations remain unchanged; it merely adopts another statutory type.

Why transform an SRL into an S.A.?

To adopt the S.A. regime - shares, board structure and other features - without losing the company's identity, assets or history.

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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