The transfer of quotas in an SRL in Uruguay is one of the most common corporate transactions in a company’s life. Whether a new partner is joining, an existing one is leaving, the capital is being reorganised or the whole business is being sold, assigning quotas in a limited liability company involves following a specific procedure with well-defined legal, tax and registry requirements. In this guide we explain everything you need to know before starting the process.

What Is a Transfer of Quotas in an SRL?

In a limited liability company (SRL), the share capital is divided into quotas, which represent each partner’s stake in the company. Unlike the shares of a corporation, the quotas of an SRL are not freely transferable by default: their assignment is regulated both by law and, often, by specific provisions in the articles of association.

Transferring quotas in an SRL in Uruguay means that one or more partners assign — partially or entirely — their stake in the company to a third party or another existing partner. This transaction changes the composition of the share capital and therefore requires a series of formal steps to be legally valid and effective vis-à-vis third parties.

Restrictions on Selling Quotas: What the Articles Say

Before starting any assignment, it is essential to review the SRL’s articles of association. Restrictions on selling quotas in a Uruguayan SRL can come from two sources: the law and the articles themselves.

The Commercial Companies Law (Law 16,060) provides that, unless the articles of association provide otherwise, transferring quotas to third parties outside the company requires the consent of partners representing the qualified majority of the capital set by law. This means a partner cannot freely sell their stake to anyone without first completing the internal approval procedure.

The articles of association may also include additional restrictions, such as:

• A temporary ban on transferring quotas for a certain period.
• A unanimity requirement to approve new partners.
• Limits on the profile of potential buyers (for example, that they are in the same line of business).
• An obligation to offer the quotas to existing partners before offering them to third parties (pre-emption right).
• Drag-along or tag-along clauses in more complex structures.

Ignoring these restrictions can make the assignment void or open to challenge, so analysing the articles beforehand is a non-negotiable step.

Pre-emption Rights over SRL Quotas in Uruguay

The pre-emption right over the quotas of a Uruguayan SRL is the right of existing partners to acquire the quotas a partner wants to sell before they can be offered to an outside third party. Its purpose is to preserve the closed nature of the company and protect the partners from the entry of unwanted people.

When the articles of association provide for this mechanism, the usual procedure is as follows:

1. The partner who wants to sell gives the other partners formal notice of their intention to assign, stating the price and terms of the transaction.
2. The partners have a set period (fixed in the articles or, failing that, by law) to exercise their pre-emption right and acquire the quotas on the same terms offered to the third party.
3. If no partner exercises the right within the set period, the assignor may sell to a third party on the same terms notified.
4. If several partners wish to exercise the right, the quotas are divided among them in proportion to their current holdings, unless otherwise agreed.

In practice, complying properly with this procedure is essential for the subsequent transfer to a third party to be legally unassailable.

The Quota Assignment Agreement in a Uruguayan SRL

The central instrument of the transaction is the quota assignment agreement of the Uruguayan SRL. This document must be executed by public deed before a Uruguayan notary public or, in certain cases, by private instrument with certified signatures, depending on what the articles of association provide.

The assignment agreement must contain at least:

• Full identification of the assignor (seller) and the assignee (buyer).
• Identification of the company and its RUT (tax ID).
• Description of the quotas assigned: number, nominal value and the percentage of total capital they represent.
• The price of the assignment and payment terms.
• A statement that the requirements of the articles (partners’ consent, pre-emption right, etc.) have been met.
• The effective date of the transfer.
• The signatures of the assignor and assignee before a notary.

In addition to the assignment agreement, the articles of association must be amended to reflect the new composition of the capital, which involves executing a deed amending the articles.

Registering the Assignment of Quotas with the DGR in Uruguay

For the transfer of SRL quotas to take effect vis-à-vis third parties, it must be registered with the General Registry Office (DGR). This is one of the most important steps in the process and often one of the most underestimated.

Registering the assignment of SRL quotas with the DGR in Uruguay involves submitting:

• A certified copy of the deed of assignment and of the amendment to the articles of association.
• Publication in the Official Gazette and another national newspaper (a legal requirement for amendments to an SRL’s articles).
• The corresponding registry forms and fees.
• The company’s certificate of good standing and any other documents the registry may require.

Until registration is complete, the assignment cannot be relied on against third parties, which may cause conflicts in later transactions such as opening bank accounts, contracting with the State or a future sale of the company.

Taxes on the Transfer of SRL Quotas in Uruguay

The taxes applicable to the transfer of quotas in an SRL in Uruguay depend on the nature of the parties involved and the economic result of the transaction. The main taxes to consider are:

• Personal income tax (IRPF): if the assignor is an individual tax resident in Uruguay, the gain on the sale of quotas (the difference between the sale price and the tax cost) may be taxed as a capital gain at 12%.
• Non-residents’ income tax (IRNR): if the assignor is an individual or legal entity not resident in Uruguay, the Uruguayan-source gain is subject to IRNR, also generally at 12%.
• Corporate income tax (IRAE): if the assignor is a Uruguayan company, the gain on the sale of quotas is taxed under IRAE at 25%.
• Property transfer tax (ITP): applies to the transfer of certain assets. Its specific application to quotas must be analysed case by case with an accountant.
• Registry and notary fees: not taxes in the strict sense, but costs of the transaction.

Tax planning before the transaction is essential, especially when there are significant capital gains or when non-resident parties are involved.

Transferring SRL Quotas in Uruguay to a Foreigner

Transferring quotas of a Uruguayan SRL to a foreigner is entirely possible and requires no special authorisation from the State. A foreign citizen can acquire quotas in a Uruguayan SRL regardless of nationality and without living in Uruguay.

However, this transaction has some particular considerations:

• The foreign assignee must fully identify themselves to the notary and meet due diligence requirements (passport, documents on the source of funds, etc.).
• If the assignee does not have their own RUT, they must obtain one from DGI as a non-resident legal entity or individual, as applicable.
• Anti-money laundering rules require identifying the beneficial owner of the resulting company, which may require additional declarations to the BCU or DGI.
• The assignor’s taxes (IRPF or IRNR) must be paid correctly, with the assignee withholding them where required by law.

Having a notary and an accountant experienced in international transactions is especially important in these cases.

Cost of Transferring SRL Quotas in Uruguay

The total cost of transferring quotas in an SRL in Uruguay varies depending on the complexity of the transaction, the value of the quotas and the professionals involved. As a rough guide, the cost components are:

• Notary fees: for the deed of assignment and the amendment to the articles of association. They are generally calculated in proportion to the value of the transaction, with minimums set by the notarial fee schedule.
• Registry fees (DGR): for registering the amendment to the articles.
• Legal publications: in the Official Gazette and a national newspaper, a relatively limited fixed cost.
• Legal and accounting advisory fees: for reviewing the articles, the tax analysis and coordinating the process.
• Taxes on the gain: if applicable depending on the assignor’s situation (IRPF, IRNR or IRAE).

In simple transactions, the professional and registry cost (excluding taxes on the gain) can range from USD 800 to USD 2,500 depending on the firm hired and the value involved. More complex transactions or those with international parties can exceed that range.

Process Summary: Step by Step

For an overall view, the full process of selling or assigning quotas in an SRL in Uruguay follows these steps:

1. Review the articles of association to identify restrictions, pre-emption clauses and approval requirements.
2. Complete the pre-emption procedure if the articles require it.
3. Obtain the partners’ consent required by law or the articles.
4. Sign the quota assignment agreement by public deed before a Uruguayan notary.
5. Execute the deed amending the articles of association to reflect the new composition.
6. Publish the amendment in the Official Gazette and a national newspaper.
7. Register the amendment with the General Registry Office (DGR).
8. Update the company’s RUT with DGI with the new composition of partners.
9. Calculate and pay the taxes on the assignor’s gain, if applicable.

Conclusion

The transfer of quotas in a Uruguayan SRL is a perfectly feasible process, but it requires completing a sequence of legal, registry and tax steps without skipping any. From reviewing the articles and respecting pre-emption rights to registering with the DGR and paying taxes, each step matters to ensure the transaction is valid, effective and free of future contingencies.

Whether you are selling your stake, bringing in a new partner or transferring quotas to a foreign investor, professional advice from the start of the process is the best investment you can make. At sociedadesanonimas.uy we support these transactions from start to finish, ensuring regulatory compliance and protecting the interests of all parties.

You may also find these guides useful:

• How to register a corporation (SA) in Uruguay
• How to register an SRL (limited liability company)
• How to register an SAS (simplified joint-stock company)
• How to register a sole proprietorship
• Buy a ready-made company in Uruguay
• SRL, SA, SAS or sole proprietorship: comparison
• Ready-made SAS for sale