Costs to Form a Limited Liability Company (SRL)

For readers not accustomed to Argentine bureaucracy, this post will show the multitude of steps required to form a Limited Liability Company (SRL) and begin to operate a small business in the City of Buenos Aires. This does not include any steps necessary to actually obtain a place of business (i.e. office space, industrial space, or a retail store). These are the steps just to create the entity itself. After completing all these steps, the company will theoretically be ready to do business.

Steps

1. Choose a company name using IGJ form #3 (reserva de nombre) and pay the required fee. This reserves the company's name for 30 days.
2. Certify the signatures of the company's owners by a notary public (escribano).
3. Deposit the initial capital of the company in Banco Nación as a guarantee (the money is returned once the company is formed). At least 25% of the subscribed capital must be deposited. The shareholders must contribute the remaining capital within two years.
4. Announce the company's formation by publishing in the Official Bulletin. The cost varies depending on the length of the publication and the fee is charged per word and per line.
5. Pay the incorporation fee.
6. Register with the IGJ and pay the registration fee. Regular and urgent filings are available, with urgent filings having a higher fee.
   
7. Buy the company's books. These books will be used to record the company's resolutions, serve as the general journal, record wages, etc.
8. Fill out a form from the College of Notaries and submit books to a notary for certification before the IGJ.
9. The Manging Partner of the SRL must request a tax password (clave fiscal) from AFIP. All company taxes will be submitted using this password.
10. Request a tax identification number (CUIT) from AFIP and enroll the company in income and VAT taxes. AFIP will require evidence of the company's address (i.e. rental contract).
    
11. Register for sales taxes with the City of Buenos Aires en Rentas, again proving the company's address.
12. Register with the Social Security Administration (ANSES).
13. Select a Labor Insurance Company (ART - Aseguradora de Riesgos del Trabajo).
14. Submit the company's wages book for certification by the Labor Ministry.

Costs (in pesos)

The costs listed here are all the miscellanius fees that you msut pay to the various government agencies in order to form a company. The fees listed here do not include any profesional fees that you will pay your attorney, accountant, and any other professionals who are assisting with the incorporation process. Those fees vary depending on the professional.

• $18 - Register company name.
• $200+ - Certify signatures (an escribano will charge $100 per signature)
• $36.50 - Banco Nación deposit fee
• $500-600 - Publishing in the Official Bulletin.
• $30 - Incorporation Fee
• $282 - IGJ Urgent Filing Fee
• $200 - Buy special books
• $415 - Certify books with the IGJ
• $50 - Register with Rentas
• $75 - Certify wages book with the Labor Ministry
• Total Cost: $1630 and up in government and other miscellaneous fees

Lawyers fees could range anywhere from $1200-1500 pesos, depending on the professional selected. At current exchange rates (3.8:1), that's about $800 USD (total, including both legal fees and government fees) to form an SRL. Of course if you're using an international law firm, a big accounting studio, etc., you could end up paying much more.

Costs to Form a Limited Liability Company (SRL)

Argentina Limited Liability Companies (S.R.L. - Sociedad de Responsabilidad Limitada)

The Limited Liability Company (S.R.L. - Sociedad de Responsibilidad Limitada) is the second most common legal entity in Argentina. It is similar to a corporation, but is somewhat cheaper to operate and there are limitations on the number of shareholders. Some of the properties of SRLs:

• Capital: Instead of shares, capital is represented by “cuotas”. There is no minimum capital requirement, but the IGJ will require the company to have capital sufficient to comply with the company’s objective (i.e. if you say you’re going to build power plants, you can’t declare the company’s capital to be $12,000 pesos)
• Partners: An SRL can have between 2 and 50 partners. Partners can be other SRLs, foreign companies, or individuals. An Argentine corporation cannot be a partner in a SRL.
• Meetings: Meetings take place according to the bylaws of the company. They are not required, as in the case of a corporation.
  
• Managers: The SRL is governed by managers, who can act individually or together, depending on the bylaws of the company. Managers do not need to be partners in the SRL.
• Transferring Ownership: It is more burdensome to transfer ownership in a SRL than in a SA, since each transfer will require a visit to the notary (escribano). There are no restrictions on the transfer of cuotas, as long as the company's operating agreement doesn't prohibit it.
  

Who Shouldn't Form a Sociedad de Responsibilidad Limitada
Firstly, it is impossible to form a SRL if there are going to be more than 50 investors, but smaller groups may still want to avoid SRLs if the company is going to need multiple rounds of equity financing. Every time ownership changes hands, the partners of an SRL must return to an escribano to sign more documents. It can be cumbersome to deal with SRLs when many investors are involved and ownership is changing hands frequently.

Who Should Form a Sociedad de Responsibilidad Limitada
Small companies with small and stable groups of investors should form SRLs. The cost is lower, there is less publishing required, and fewer administrative burdens. SRLs are designed to accomidate smaller businesses which by nature of their size do not need all the formalities of corporations.

Argentina Limited Liability Companies (S.R.L. - Sociedad de Responsabilidad Limitada)