6/9/2022 - Economy and Finance

The responsibility of the Directors in the Anonymous Societies

By Enrique Tourvel Munilla

The responsibility of the Directors in the Anonymous Societies

The responsibility of the Directors and the concept of the good businessman in the Anonymous Societies

Will you be the director of an anonymous society in Argentina? What are the risks?

In this article the answers to these questions will be briefly developed on the basis of the two basic obligations arising from national social legislation: the duty of loyalty and the diligence of the good businessman (Law 19.550:59).

It should be pointed out that the directors are the members of the governing body of the anonymous society, whose duty is to act in accordance with the social interest to, by fulfilling the object referred to in the statute, comply with the purpose of profit, the ultimate goal of every commercial society (LGS: 1).

That is why those who are appointed directors must work with loyalty and diligence of a good businessman. In the first case, the regulation concerns the obligation not to compete, i.e. not to carry out or participate in activities other than the company which gave it competence, as well as the duty to reserve, among others.

The concept of “good businessman”, it was clear the purpose of the legislator by leaving the interpretation of it in hand, whether of the Executive Branch through the normative decrees (CN: 99.2), or of the Judicial Branch at the time of exercising its function for the resolution of conflicts in particular.

In matters of doctrine, Vítolo defines the good businessman as that active subject who cares and strongly engages in his work and that “poses a vast knowledge of negotiations, while understanding the way and the way in which the market behaves, alerting - even - the interference that the public authorities might have in the economy” (Vítolo, Daniel R., Manual of Societies, Editorial Study, p. 684).

Not only should the good businessman understand the way and the way the market behaves, but must - and presume - have a vast knowledge of the activity that society administers.

But what are the consequences of the carelessness of the directors in case they do not comply with the social order, its object and the end of profit?

Law 19.550: 59 expresses that those who lack their obligations (to know of the loyalty and diligence of the good businessman) will be responsible, unlimited and solidarity, for the damages and losses arising from their action and omission. Add the regulatory body in your article 274 that will respond - with the range indicated - in front of society, shareholders and third parties, by the bad performance of your position.

We previously demonstrated the manager's obligation to know the business he runs. In this sense, a custom has been generated within the Argentine trade to use as directors to lawyers who do not have the know how necessary on the activity of the undertaking which they administer.

Although this generates a certain ease for shareholders, since they have a legal advice covered by the director's remuneration, the truth is that it is contrary to the legislator's requirements. The director cannot apologize for not having a vast knowledge of business activity in case of a worker without the diligence that imposes the law, since they “are in charge of managing – following the parameter of conduct of the good businessman – the social goods, with the aim of, through the realization of profit, fulfilling the social object” (CNCom B, 30/08/2021, Cheb Terrab).

Ergo, designating a lawyer as director of a marketing and technology society is at least reckless, both from the shareholders and from whom he holds office.

It should be noted that the same obligations run for those who are appointed by foreign companies to exercise trade in our country, as Law 19.550 has in its Article 121. o.

In conclusion, it must be borne in mind that national regulations are really demanding in relation to the behaviour that the directors of public limited companies must have and blame them for the damage to society, shareholders and third parties.

This situation reveals that the directors must be chosen to know the know how of the corporate activity - by the shareholders - and it is necessary to know the responsibilities, obligations and consequences that the office entails for those who wish to detect it.

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enrique tourvel

Enrique Tourvel Munilla

Hi, I'm Enrique Tourvel, a lawyer with public law guidance. Currently I perform in the Judiciary of the Nation - Fuero Comercial. Professor of General Elements of Commercial Law and Societies at the University of Buenos Aires.
Specialized in corporate law.

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