Today it can be stated that the types of commercial companies that are most used for the development of commercial activities in Colombia are the Sociedad por Acciones Simplificada (S.A.S.), the Sociedad de Responsabilidad Limitada (Ltda.) and the Sociedad Anónima (S.A.).
The S.A.S. has become the most widely used legal vehicle since, as its name indicates, it «simplifies» the procedures for its incorporation, administration, composition, operation and structure and fulfills the purpose of creating a legal entity different from that of its shareholders.
Below, we share some relevant aspects about the mercantile companies in Colombia from their constitution to their dissolution and liquidation:
1. Incorporation of a commercial company in Colombia
The incorporation of a company is done through a public deed or a private document depending on the corporate structure selected by the merchant.
2. Commercial registration
The companies must register in the commercial register that in Colombia is carried out by the Chamber of Commerce. This must be done in the city where the company establishes its main domicile, registering the documents of incorporation, the letters of acceptance from the administrators and tax inspector (if so provided in the document of incorporation) and making the payment of duties and taxes of the registry.
3. Registro Único Tributario (RUT) – Tax ID
The RUT is a form that is requested from the DIAN and contains the general data of the taxpayer, the NIT (which must be updated before the Chamber of Commerce), as well as its responsibilities in tax and customs matters.
4. Payment of capital
As a general rule, the amount of the minimum capital for the incorporation of companies is set by the shareholders. However, in S.A.S, at least 50% of the authorized capital must be subscribed and one third of the value of each share must be paid, having a maximum term of one (1) year to pay the balance. In the case of S.A.S., the full amount of the subscribed capital must be paid within a maximum term of two (2) years.
5. Financial Statements
Commercial companies must generate general purpose financial statements duly certified and audited at least once a year, on December 31st. The financial statements are deposited once a year with the Chamber of Commerce of the domicile of the corporation, provided that there is no obligation to send them to the Superintendence of Corporations.
6. Utilities
Profits are distributed taking into account the financial statements once legal, statutory and occasional reserves have been made and taxes have been paid. In S.A.S. it is not mandatory to have a legal reserve, unless otherwise stated in the bylaws. It is clarified that clauses restricting the participation in profits to any of the shareholders will be null and void.
7. Dissolution and liquidation
For the extinction of a commercial company, it must be dissolved and liquidated, ending with the cancellation of the commercial registration. In general, commercial companies are dissolved by:
- The decision of the associates,
- The reduction in the number of associates,
- The expiration of the term for its duration,
- The impossibility of developing its social object,
- The causes expressly agreed in the company’s articles of association,
- Among others.
When the company enters into dissolution and liquidation, it must include the expression «in liquidation» in its corporate name.
If you are interested in obtaining more information and legal advice, please contact
Socia ELH
juanita@estudiolegalhernandez.com
Coordinador Derecho de la Empresa ELH
ignacio@estudiolegalhernandez.com
Derecho Corporativo y Comercial ELH
camilo@estudiolegalhernandez.com
Remember that ELH provides legal, fiscal and accounting representation outsourcing.