Effects of excluding a member (LGS art. 92)
Article 92 of the General Companies Law sets out the effects of exclusion: the excluded member is entitled to the value of the interest as of the exclusion date, shares in pending operations and the company may retain the amount until those operations conclude.
What article 92
Article 92 details the financial consequences of excluding a member.
Exclusion has the following effects: 1) the excluded member is entitled to a sum representing the value of the interest as of the date exclusion is invoked; 2) the member shares in profits or bears losses from pending operations; 3) the company may retain the member’s amount until transactions in progress are completed; 4) if the member contributed an asset indispensable to the business, the interest is paid in money; 5) the member remains liable to third parties for obligations until the exclusion is registered.
Source: Law 19,550, art. 92 — InfoLEG (updated official text)
Commentary
It complements article 91 by defining how the excluded member’s interest is liquidated. Value is fixed as of the exclusion date and the company may retain the amount until ongoing operations are completed. Valuation is often the core of the dispute.
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