On December 23, 2022, the Argentine General Inspection of Justice (“IGJ”) published in the Official Gazette Resolution No. 17/2022 (the “Resolution”), which declared the irregularity and ineffectiveness of the quarterly board minutes of the companies, in which it is stated that the meeting was held in order to comply with the provisions of Section 267 of the General Corporations Law.
In the Resolution the IGJ maintains that: “although Article 267 of Law 19,550 provides that “The Board of Directors shall meet at least once every three (3) months, unless the bylaws require a greater number of meetings…”, this does not mean – in any way – that the duty of the Board of Directors to transcribe, in the corresponding minutes, the deliberations and decisions adopted by such body in the terms required by Articles 73 and 249 of Law 19,550, may be replaced by the mere mention of Article 267, and thus be considered as complied with the obligation provided for in this provision”. 550, can be replaced by the mere mention of Article 267 and thus consider the obligation provided for by this provision to be fulfilled”.
The Resolution does not admit that the minutes do not detail the transactions or actions that were considered at such meeting, the statements made in the deliberation, the manner of voting and its results, as well as the omission in the complete expression of all the issues discussed and the decisions adopted. The IGJ emphasizes that if it were only recorded that the meeting was held to comply with the regulation, Section 267 of the LGS would be meaningless, since the historical purpose of the Minutes Book, its evidentiary function and the compliance with the substantial and formal formal formalities in the adoption of the resolutions of the Board of Directors would be lost, with the emerging responsibilities implied by the casting of votes by the members of the administrative body.
In the words of the IGJ “The purpose of the preparation of the minutes is to allow the creation of a historical file on the background of the company, through the content of the corporate decisions adopted over time”.
The requirement to prepare the minutes in due form is based on: a) Its entry in a special book is the means to avoid substitutions; b) The recording of the minutes in the book is necessary for the exercise of certain rights, especially the right to challenge the meetings (Article 251 of Law 19,550); and, c) The minutes constitute a means of proof, since they document the facts recorded in the corporate act, but do not create them.
In conclusion, the Resolution establishes that the drafting of minutes without detailing what was specifically discussed or deliberated, and, eventually, without recording what was voted by the directors present, i.e., minutes prepared with the mere reference to Article 267 of Law 19,550, lacks any legal value.
