Public Registry of Commerce (Inspección General de Justicia) – General Resolution No. 17/2021

Resolutions

On November 23, 2021, General Resolution 17/2021 of the Public Registry of Commerce (“IGJ“) was published in the Official Gazette, whereby an amendment was introduced in the section that defines the Beneficial Owner.

Prior to the referred resolution, the controlling agency defined beneficial owners as those human persons holding at least 20% of the capital or voting rights of a legal entity, or who by other means exercise final control, directly or indirectly, over a legal entity or other legal structure.

The new regulation arises as a consequence of Resolution No. 112/2021 of the Financial Information Unit (“UIF“), whereby the percentage threshold for a person to be considered a beneficial owner is reduced from 20% to 10%.

This amendment affects, primarily, General Resolution 7/15, section 510, subsection 6. Said subsection defines what the IGJ understands as beneficial owner, making reference to the current regulations of the Financial Information Unit and to any “regulation of said agency that in the future may modify or replace it”.

In this sense, the IGJ subordinates its definition to that which is dictated by UIF. In the same line, Resolution 7/15, Section 518 was amended, replacing the previous reference to Section 510 by a direct reference to the provisions of UIF Resolution No. 112/2021, Section 2.

Finally, the new regulation requires that, in the case of a chain of ownership, the chain must be described including the beneficial owner, and in each case, attaching the corresponding supporting documentation, corporate bylaws, share ledgers, contracts, transfers or any other document evidencing the chain of control.

The aforementioned provisions represent a more burdensome compliance with the obligation imposed for each procedure in which the beneficial owners must be accounted for.