Law No. 19,969 of 2021 provides for the creation of the BIC (Sociedades de Beneficio e Interés Colectivo – Collective Benefit and Interest Companies).
1. What is the purpose of the Law?
The purpose of this law is to obtain an organized economic activity to participate in the profits and bear the losses, include in its corporate purpose to generate a positive social and environmental impact on the community, in the forms and conditions the law and the regulations established. Consequently, generating a positive social and environmental impact on the community.
2. Which companies may form a BIC?
Companies incorporated under any of the types provided for in the Law on Commercial Companies, Simplified Joint Stock Companies, and those eventually incorporated to such regulations, being created independently thereto.
3. Requirements to qualify as BIC companies or trusts
The requirements to qualify as a BIC are as follows:
- They must include in their bylaws or articles of incorporation the purpose of generating a social, environmental, positive, and verifiable impact, in addition to the requirements demanded by the particular application rules.
- They must include in their articles of incorporation the requirement of the favorable vote of 75% (seventy-five percent) of the capital of their partners and shareholders for any modification of the corporate purpose.
4. Administration, control, and transparency
Directors and trustees shall consider the effects of their actions or omissions regarding to:
- Partners or beneficiaries.
- Current employees and the contracted workforce, in general.
- The communities with which they are linked, the local and global environment.
- The long-term expectations of the partners and the partnership, the beneficiaries and the trust, whose case the purposes of the partnership or the trust are realized. The fulfillment of the obligation required by the partners and the beneficiaries of the trust.
In addition, they must prepare an annual report with public access, eventually accrediting the actions carried out to comply with the positive social and environmental impact foreseen in their articles of incorporation or bylaws, including it in the annual report. The requirements and publicity mechanisms will be established by regulation.
The same must be filed within a maximum period of six months as of the closing of each annual fiscal year to the agency or authority determined by the regulations.
5. Failure to comply with obligations
If non-compliance becomes evident, the company will lose its BIC status. Such disqualification may be inferred ex officio by the competent authority upon finding the non-compliance, or it may be raised by any partner or interested third party before the competent Justice to declare it so, without prejudice to the actions provided for in Article 4 reserved to the partners of the company or beneficiaries of the trust, as the case may be.
For more information on the present law, click here: Diario Oficial (08.20.2021) – Documents Section.
Source: Diario Oficial 20/08/21