Legal Issues concerning land holding.

The purpose of these comments is to give a simplified overview of the main legal options concerning the ownership of rural real-estate and/or the holding of farming establishments in Uruguay. A legal analysis of the legal provisions in force is attached hereto.

In Uruguay individuals can, in principle, own rural real-estate and/or be the holders of farming establishments, for which there is no restriction whatsoever. There are no constraints either concerning the legal nature of the companies who own farming establishments. No impediments exist with regard to their corporate form, by way of example there can be: Partnerships, Limited Liability Companies, General Partnerships or Joint-Stock Corporations with registered shares. We shall briefly analyze the latter which is the most common. 

A joint-stock corporation (S.A. in its acronym in Spanish) is easily formed and the simple formalities can be undertaken at our Offices. Once it has been established, the shares of stock are issued. At the time of incorporation, and pursuant to instructions given by the stockholders, the by-laws and regulations that shall govern its operation are adopted. These articles of incorporation determine the authority of the Board of Directors appointed by the stockholders to govern the corporation, and the Board may in turn grant special powers on the individuals entrusted with the actual management of the farm.

The annual shareholders meeting evaluates the actions of the Board and may then ratify its members for the following financial year or appoint an entirely new Board of Directors.

The simple procedures to be fulfilled for the formation and administration of an S.A. in Uruguay, coupled with the possibility for it to be managed following simple requirements, make it the most advisable legal form when a group of individuals own rural real-estate or are the holders of large farms