Below we summarize the main aspects discussed in said session and the contributions of the AIN as a result of the work of a multidisciplinary team of the organization:

– AIN understands that the contribution is welcome, being aware that it is a 1989 law with specific modifications and“…which must adapt in many aspects to the current reality and the dynamics of the commercial world of the 21st century, incorporate modern concepts of comparative law, as well as resort to new technologies to enhance and simplify the functioning of commercial companies”.

-They state that the objective and imprint of this Administration is the debureaucratization of the procedures carried out in the State.

-The project proposes eliminating all controls committed to the AIN established in article 409, leaving only operational control over:

– Public limited companies that make public offerings of negotiable obligations.

– Companies in which the State participates, a control that AIN already has today by article 199 of Law No. 16736.

– Controlled and controlling, both those open and those listed on the stock exchange.

-One of the reasons for the elimination of article 409 is to avoid duplication of controls between AIN and the National Registry of Commerce and about this the AIN mentions:“This statement is erroneous because the registration qualification criteria are limited by the registration law and its objective is to provide enforceability against third parties. The registry does not clean up nullities, it does not validate them and, in fact, it does not have the audit study to approve and give that control of legality to the statutes. Furthermore, the audit has a multidisciplinary approach, since it is made up of accountants, lawyers, notaries (…), which the registry does not carry out because it does not have that experience.”.

-Proposal of the AIN in a new wording of article 409, which “…part of the basis of why control (…) has to give added value” (bold type belongs to us) and a new alternative is proposed:

-Eliminating the following controls:

1. 1. Name and address change reforms: which will go directly to the Registry.
   2. Increase in social capital: about which today only communication is required.
   3. Merger and split: As long as the control is later.
   4. Dissolution: while the companies do not request dissolution approval from the AIN and neither is an added value added.

-Maintaining the following controls:

1. 1. Constitution and reforms of the statute, considering in this case that clauses that contradict norms are introduced in the statute.
   2. Variations of capital, in cases in which new contributions in cash, in kind or capitalizations of liabilities are incorporated.

Text proposed by AIN in a document delivered to the Commission in April 2023 and published on the office’s website:

Article 409 (State control. General Principles). Every public limited company will be subject to the supervision of the state control body regarding the constitution, modification of its social contract with the exceptions established in this article and the others provided by law, transformation of any type of company to a public limited company, and the creation of a new public limited company by merger or division. In addition, they must communicate the following variations in the integrated capital: increase made by new contributions, reduction, refund, redemption or amortization of shares.

Open corporations will also be subject to state control during their operation.

Modifications to the corporate contract that consist exclusively of a change in the company name or domicile, or both, will be exempt from the inspection of the state control body; and those that consist of the increase in contractual capital (art. 284); which will be registered directly in the Registry of Legal Entities, National Commercial Registry Section, without prior administrative control or conformity of any kind, and must be published within the period provided for by article 255.

Maintain wording and eliminate last paragraph of Article 289 (Communication to the control body). When the capital increase is carried out through new contributions, whatever their type, the integrations made will be communicated to the state control body.

Other modifications referred to in the Commission session by the AIN:

-Mandatory capitalization of equity items (Art. 287 and 289).

-Capital Redemption – incorporates the Proportional Asset Value criterion for the value of the shares (Art. 312).

-Dissolution and Reimbursement of the dissolution (Art. 159 and 160).

-Autonomy of the will – incorporating that this will not govern when it comes to mandatory application of provisions of the law that have an imperative nature (Art. 1).

– Transfer of quotas of limited liability companies: It has effects against third parties from its registration in the Registry (Art. 231).

-Bearer shares: As of the entry into force of the law, they cannot be established (Art. 304).

Proposals in documents delivered by AIN to the commission, additional to those previously referred to and which, in case of interest, we refer to you for reading:

-Financial statements and appropriate accounting standards (Art. 89 and 91).

-Reserva Legal (Art. 93).

-Financial Statement Records (Art. 97 Bis).

-Distribution (Art. 98).

-Exclusion of partner (Art. 147).

-Open Joint Stock Companies (Art. 247).

-Subscriptions and integrations. Administrative procedure (Art. 252).

-Registration in the Registry of Legal Entities, National Commerce Registry Section (Art. 253).

-Minimum subscriptions and integrations (Art. 280).

-Special provision (Capital increase made up of new contributions) (Art. 287).

-Capital reduction (Art. 290).

-Right of withdrawal in case of lack of dividend distribution (Art. 320).

-Special cases (merger, division, transformation, extension or early dissolution, transfer of domicile abroad, fundamental change in the object, increase in share capital or reintegration of integrated capital) Adding “inclusion or exclusion of an arbitration clause” and in addition to its publication in the Official Gazette incorporating the obligation of publication on the corporate website (Art. 362).

-Recess in cases of special cases. Maintain the current wording. (Art. 363).

-Liability of administrators, directors, trustees and members of the tax commission. Maintain current wording (Art. 417).

You can access the documents with the proposals presented by AIN at the following link:

https://www.gub.uy/ministerio-economia-finanzas/comunicacion/noticias/ain-comparece-ante-comision-especial-para-modificacion-ley-16060