Sports Corporations: Amendments to the Regulation of the Sports and Physical Activity Law
On August 14, 2024, the National Executive Power Decree No. 730/2024 (the “Decree“) was published in the Official Gazette, which modifies the regulation of Law No. 20,655 on Sports and Physical Activity, in accordance with the reforms introduced by the Emergency Decree No. 70/23 (the “DNU 70/23“).
The Decree establishes the conditions and rights of corporations whose social purpose is sports and physical activity, as well as those of civil associations that transform into them or become partners of such corporations.
Among the main aspects regulated by the Decree are:
- The definition that the two-thirds majority required by DNU No. 70/2023 for the decision to become corporations will be calculated based on the members present at the respective members’ meeting.
- Granting associations, federations, and sports confederations one year, starting from the entry into force of the Decree, to modify their statutes to comply with the new provisions.
- Prohibiting associations, federations, and sports confederations from preventing, hindering, depriving, or undermining any right of a sports organization, including its affiliation to a confederation, federation, association, league, or union, based on its legal form, whether original or derived.
- Guaranteeing that organizations that modify their legal structure by adopting the corporate form will have the right to maintain their participation in any competition in which they were involved under their previous legal structure and under the same conditions.
- The inapplicability of the limitations provided in the law for civil sports associations regarding the composition of the board of directors, the presidency, and the duration of the mandates of corporations and civil associations that transform or become partners of corporations, which will be governed by the General Companies Law No. 19,550.
The Decree entered into force since the day of its publication in the Official Gazette.
We invite you to consult the full text of the Decree, which is available at the following link.
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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.
