Liability of directors and managers.
Directors and managers of a company have the following duties and obligations, which may generate its eventual responsibility for incumpliment. They primarily are based on the principle and “duty to act loyally and as a good businessman”
- Prohibition to contract with society: The General Corporation Law provides in Art. 271 that the director can hold society contracts that activity in which it operates, always to be concluded on market conditions. Contracts that do not meet these requirements may only be held prior approval of the board and shall be notified to the assembly.
- Performance of directors contrary to social interest: If the principal has an opposite interest to society, to inform the board of directors and trustees and should refrain from intervening in deliberations to avoid incurring any liability under Article 59 of the General Corporation Law.
- Activities directors in competition with society: The director of a corporation has an ethical duty not to use the information, technical, commercial or administrative knowledge gained from holding office director, to use for their own benefit and detriment of
- Other grounds provided by the Companies Act: Directors personally liable for unlimited solidarity towards society, shareholders and third parties for the poor performance of office for violation of the law, statute or regulation or any other damage caused by fraud, abuse of authority or gross
- Responsibility for violations or customs offenses: According to the Customs Code, where a company was convicted of any offense or customs offense, and once intimated to pay the company not meet the amount of the financial penalties, directors jointly and severally liable with the company for payment of the amount.
- Criminal liability of directors: In addition to the civil liability of directors considered at present, the Argentine criminal law imposes prison sentences directors for violation of its obligations to defraudatoria intent.
- Property damage liability for violations of the exchange rate regime regulated by the Central Bank Communications of the Republic, Competition and Social Security, among others.
Imprisonment for cases of repeated breaches of exchange rate regime (Criminal Exchange Regime – Law 19,359).
In accordance with the Companies Act, each director is jointly accountable for any wrongdoing, but can be assigned different degrees of responsibility depending on the individual participation of the director.
While the directors are jointly liable for any wrongdoing committed by the Board, a director shall be relieved of liability if the director leaves written protest regarding the corporate resolution which caused the damage record.
Directors (whether or not domiciled in Argentina), must register with the Integrated Retirement and Pension System as self-employed.