In brief
The Public Registry of the Province of Buenos Aires (Dirección Provincial de Personas Jurídicas de la Provincia de Buenos Aires or DPPJ), by means of Disposition 43/2024, issued new requirements applicable to stock corporations registered with the DPPJ in relation to the filing of financial statements, the content of the annual report, the treatment of the results for the fiscal year, the order of priority in the absorption of accumulated losses, and technical revaluations, among others.
In depth
Regulatory changes
The following regulations apply to stock corporations whose registered office is in the province of Buenos Aires and that are registered with the DPPJ.
1. Filing of financial statements with the DPPJ
The new regulation provides that stock corporations that do not fall within the scope of any of the cases provided for in Section 299 of the Argentine Companies Act (ACA) must file their annual or interim financial statements, as the case may be, in accordance with the following guidelines:
(i) Deadline: The deadline for filing is 30 calendar days from the date of the shareholders’ meeting approving the financial statements. The filing will be considered made “beyond the legal term” after five months have elapsed since the fiscal year-end or when the 30-day period for filing has expired.
(ii) Digital filing: The filing is made digitally through an electronic form published on the DPPJ’s website, where a special electronic address must be declared, and the administrative and special fees as well as the corporate and accounting documentation detailed in the provision must be attached.
(iii) Individual to make the filing: The company’s legal representative, or the public accountant who executed the financial statements, must make the filing.
(iv) Nature of the submission: The required documentation will be deemed to be filed as a sworn statement as to its authenticity and accuracy.
(v) Digital certification: The required accounting documentation should be submitted digitally certified by the Professional Council of Economic Sciences of the Province of Buenos Aires (Consejo Profesional de Ciencias Económicas de la Provincia de Buenos Aires or CPCEPBA).
(vi) Audit report: The financial statements must have an audit report from a public accountant and contain a well-founded opinion on the same.
(vii) Special auditing: Companies under special supervision (of the Central Bank of the Argentine Republic, the Superintendence of Insurance of the Nation, among others), may submit their financial statements in accordance with the regulations of such bodies.
Failure to submit or late submission will entitle the DPPJ to apply the corresponding sanctions.
2. Annual report
The new regulation requires that the annual report to be included in the financial statements be prepared in accordance with the information provided for in Article 66 of the ACA. This includes events or transactions that occurred between the closing date of the financial statements and the date of the notes to the financial statements that could significantly change the financial position and results of the company as of the date of those financial statements.
The DPPJ may require a supplementary report to the annual report, if deemed necessary, which should form part of the financial statements and be transcribed in the company’s inventory and balance sheet book.
3. Treatment of the results of the financial year
The new regulation provides for a regime for the consideration of the results shown in the income statement account for the fiscal year, both in the case of profits and losses, as follows:
(i) Profits: These must be expressly considered by the shareholders for the distribution of dividends, to maintain them to accumulated results for future fiscal years and/or for allocation to an optional reserve for a specific purpose.
(ii) Negative results: In the event of losses that would place the company under the scope of dissolution or mandatory reduction of share capital, the meetings must adopt the respective resolutions related to such circumstances.
4. Order of priority in the absorption of losses
The new regulation establishes the following order of allocation of the accounts or items of shareholders’ equity for the offset of losses: (i) legal, statutory and optional reserves; (ii) technical-accounting reserve for technical revaluations; (iii) share premiums; (iv) capital adjustment; (v) irrevocable contributions; and (vi) share capital.
5. Technical revaluations
With the exception of biological assets, companies may measure their property, plant and equipment at their revalued value using the criteria contained in the technical standards in force adopted by the CPCEPBA. This procedure requires the DPPJ’s prior approval, for which it establishes the requirements for registration, including corporate documentation and a report from an independent valuator.
The balance resulting from the revaluation must be allocated to a technical-accounting reserve, which will be identified in the net worth and be treated in accordance with the technical accounting standards in force in the province of Buenos Aires.
Click here to read the Spanish version.
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Nicolás Cabrera Romero, Associate, and Paola Caballero, Associate, have contributed to this legal update.
