Companies Act 19,550 · Article 94 — Dissolution: grounds

When a company is dissolved (LGS art. 94)

Article 94 of the General Companies Law lists the grounds for dissolution: events that open the liquidation stage. They range from a members’ decision and expiry of the term to achievement or impossibility of the corporate purpose, loss of capital, bankruptcy or merger. Once a ground occurs, the company retains legal personality only for liquidation.

Source: Act 19,550

What article 94

Article 94 lists the grounds for dissolution. Dissolution does not immediately extinguish the company: it opens liquidation, during which the company remains in existence to realize assets and discharge liabilities.

Official text · Act 19,550, art. 94

The company is dissolved:

1) by decision of the members;

2) upon expiry of the term for which it was formed;

3) upon fulfillment of the condition to which its existence was subject;

4) upon achievement of the purpose for which it was formed, or supervening impossibility of achieving it;

5) upon loss of the share capital;

6) upon a declaration of bankruptcy; dissolution ceases to have effect if a settlement is reached or conversion is ordered;

7) upon its merger under article 82;

8) upon a final sanction cancelling the public offering or listing of its shares; dissolution may be set aside by an extraordinary shareholders’ meeting held within sixty (60) days in accordance with article 244, fourth paragraph;

9) upon a final decision withdrawing authorization to operate where special laws require such authorization by reason of the corporate purpose.

Source: Law 19,550, art. 94 — InfoLEG (updated official text)

Commentary

Not every ground is final. Several are reversible: bankruptcy ceases to cause dissolution if a settlement or conversion occurs; cancellation of a public offering may be reversed by an extraordinary meeting within 60 days. Article 100 also permits the removal of the ground and continuation of the company where there is economic and social viability.

Application of loss of capital (item 5) has been suspended by emergency legislation during various periods; its current applicability must be checked. If a ground is not removed, a liquidator is appointed and the company enters liquidation, retaining personality for that limited purpose.

Distinctions often confused

Dissolution is not the same as Liquidation. Dissolution is the event that opens the process; liquidation is the process of realizing assets, paying liabilities and distributing any surplus. The company continues to exist during liquidation.

Dissolution is not the same as Cancellation of registration. Registry cancellation is the final act extinguishing the company, only after liquidation is completed.

Practical impact

When a possible dissolution ground appears, prompt action is advisable: many grounds are reversible and article 100 favors company survival. Allowing a ground to persist without removing it or liquidating properly exposes administrators to liability.

Frequently asked questions

Does dissolution extinguish the company?

Not immediately. It opens liquidation, during which the company continues solely to realize assets, pay liabilities and distribute any surplus.

Can dissolution be avoided after a ground has occurred?

In many cases yes. Article 100 permits removal of the ground if economic and social viability exists, and some grounds have their own reversal mechanisms.

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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