IGJ Regulatory Update: News regarding the Annual Report to the Financial Statements
On July 16, 2024, the Public Registry (“PR”) enacted General Resolution No. 15/2024 (“GR IGJ 15/2024”) that replaces the previous regulatory framework established by General Resolution No. 7/2015 and affects local and foreign companies, and non-governmental entities.
GR IGJ 15/2024 introduces significant changes to the regime applicable to regulatory provisions relating the Board of Directors/Managers’ Annual Report to the Financial Statements issued by joint-stock companies and/or limited liability companies which capital stock exceeds the amount indicated in subsection 2 of the Section 299 of Argentine Law No. 19,550 (“AGCL”) registered in the City of Buenos Aires (the “Extended Annual Report”).
Below, we detail the most notable points:
New requirements for the Extended Annual Report
The information requirements for the Extended Annual Report are simplified since it is no longer required to include in the report the following matters:
- Information on the financial situation, results, and generation and application of funds, comparative with the previous fiscal year.
- Description of the main internal and external financing sources used by the company, together with an analysis of the main origins and applications of cash flow of the fiscal year that provides understanding of the company’s financial condition.
- Description of the nature and conditions of the main transactions carried out during the fiscal year between related parties, as well as loan operations in which the company or any of its controlling or controlled entities is a party, and an analysis on whether they are unusual or extraordinary.
In addition, it is no longer needed to prepare the Extended Annual Report following the order established by GR IGJ 16/2024, and in cases in which there is no information to provide on certain items, it is no longer needed to state such circumstance.
Exemption to prepare an Extended Annual Report.
It is no longer required express authorization from the Shareholders’ Meeting to be exempted to prepare the Extended Annual Report, and it can be prepared including only the information required under Section 66 of the AGCL and the general provisions of GR IGJ 15/2024.
Effectiveness and Early Application
GR IGJ 15/2024 will be effective as of November 1, 2024. However, for procedures that are initiated or in progress before that date, the early application of the more favorable provisions of the new resolution may be requested.
We encourage you to review the full text of Annex I of General Resolution No. 15/2024, available at the provided link.
In the coming weeks, we will continue to share biweekly newsletters that will offer more details and guidance on other relevant aspects of General Resolution No. 15/2024.
For additional inquiries, please do not hesitate to contact:
This message is of a general informative nature and should not be considered as legal advice. In case you need professional assistance, please contact our experts.