100% Digital Corporate Minutes: Paperless Execution with the Same Legal Effect

Second installment of our series on the Competitiveness and Cost of Living Reduction Bill.

What Changes

The Bill amends Section 336 of Law No. 16,060, allowing commercial companies to replace their shareholders' meeting and management and supervisory body minute books with electronic or digital records. Minutes may be signed using any type of electronic signature, without requiring an advanced electronic signature. At the same time, the Bill declares the progressive implementation of electronic notarization to be a matter of national interest and establishes a working group that, within six months, must propose the legislative and regulatory changes needed to promote its adoption.

The Key Detail That Changes the Analysis

The Bill provides that any type of electronic signature—including a simple electronic signature—will be sufficient. This opens the door to the use of widely available, low-cost electronic signature tools, without requiring investment in advanced digital certificates for this specific purpose.

The Trade-Off: Simple Electronic Signatures Are Easier to Implement, but Also Easier to Challenge

The fact that the law does not require an advanced electronic signature does not mean that the choice of signature is irrelevant. An advanced electronic signature benefits from a legal presumption of authenticity and integrity, making it significantly more difficult to dispute in the context of a corporate dispute. By contrast, when a simple electronic signature is used, the burden of proving its authenticity falls on the party seeking to rely on the signed minutes if their validity is challenged. A shareholder dissatisfied with a corporate resolution, for example, will generally have greater scope to contest minutes signed with a simple electronic signature than those executed using an advanced digital certificate. Accordingly, the appropriate level of electronic signature should be determined based on the nature of the corporate resolution—for example, a routine administrative matter is fundamentally different from a capital increase or a merger—and on whether there is an existing or potential shareholder dispute, rather than solely on the cost of the signing solution.

The Paper Record Does Not Disappear: It Will Coexist with the New Digital Format

The Bill authorizes companies to replace the format on a prospective basis only; it does not require the retroactive digitization of minutes already recorded in physical minute books. For companies with decades of corporate records in paper format, this means maintaining two parallel systems: the historical physical books and the new digital records from the date the company decides to migrate. Ensuring a clear and traceable transition—identifying precisely where one record ends and the other begins—will become an important point of review in future legal audits and due diligence processes.

Practical Application — What Should Be Defined Before Migrating

• Adopt an internal signature policy based on the type of corporate resolution: use simple electronic signatures for routine corporate minutes and advanced electronic signatures for high-impact resolutions (such as capital increases, mergers, amendments to the bylaws, or the removal of directors), rather than applying a single standard across all corporate decisions.
• Select and formally document the electronic or digital recordkeeping system to be used, ensuring long-term integrity and accessibility. A file stored in a shared folder without version control is not equivalent, from an evidentiary perspective, to a properly maintained corporate minute book.
• Clearly establish the cut-off point between the historical physical books and the new digital records, expressly recording in the physical minute book both the migration date and the digital system adopted.
• Where board meetings or shareholders' meetings are held remotely, take advantage of the digitization of the minutes by aligning the signing process with the remote meeting format, rather than printing and rescanning a document that originated in digital form.
• Closely monitor the forthcoming regulations on electronic notarization. As this framework develops, it is likely to establish standards that will also influence what constitutes an adequate digital recordkeeping system for corporate minute books.

Commentary

At first glance, the legal authorization to digitize corporate minute books appears to be an unquestionable step forward in improving the efficiency of corporate record management. However, the real challenge in implementing the new framework will be designing, from day one, a signature policy that assigns the appropriate level of electronic signature to each type of corporate decision, ensuring that the migration to digital records does not create more disputes than it resolves.