Bylaw amendments

Capital reduction

The company needs to adjust its capital, either by voluntary decision or to absorb losses affecting it.

In one line

Distinguish between voluntary reduction (arts. 203/204) and reduction for losses (art. 206); each has its own requirements and effects, and some require creditor protection.

First steps

Determine whether the reduction is voluntary or due to losses
Have the resolution approved by the competent corporate body
Comply with publication and the creditor objection period
Address any objections raised
Register the reduction with the relevant authority

Types of capital reduction

Articles 203 to 206 of Law 19,550 govern capital reduction. Voluntary reduction (arts. 203 and 204) reflects a company decision, while reduction for losses (art. 206) seeks to align capital with net worth.

Voluntary reduction may require the involvement of the statutory auditor and includes creditor protection mechanisms, allowing creditors to object under the legal procedure.

Procedure and safeguards

Article 204 provides for publication and creditors' right to object in an effective voluntary reduction, safeguarding the guarantee that capital represents to third parties.

We determine the applicable method, draft the corporate body's resolution, manage publications and registration, and handle any creditor objections.

Common mistakes

Confusing voluntary reduction with reduction for losses
Omitting creditors' right to object
Failing to document the accounting basis for the reduction
Dispensing with statutory auditor involvement when required

Frequently asked questions

What is the difference between voluntary reduction and reduction for losses?

Voluntary reduction (arts. 203/204) arises from a company decision; the reduction under art. 206 seeks to adjust capital to losses.

Can creditors object?

In an effective voluntary reduction, art. 204 grants them a right to object within the legal procedure.

Does the reduction require registration?

Yes; like any capital modification, it must be formalized and registered with the relevant authority.

This page is informational and does not replace professional advice on your specific case. It does not imply any promise of results.

Reduce your capital in compliance with the legal procedure

We handle the reduction and creditor safeguards. Contact us to discuss your case.

Ask via WhatsApp