Corporate Law at Colombia
Sure! Here’s a concise overview of Corporate Law in Colombia:
🇨🇴 Corporate Law in Colombia
1. Legal Framework
Corporate law in Colombia is primarily governed by the Commercial Code of 1971 (Código de Comercio) and supplemented by various laws and decrees.
The General Stock Corporation Law (Ley 222 of 1995) also regulates company management and corporate governance.
The Superintendence of Companies (Superintendencia de Sociedades) oversees corporate regulation, supervision, and enforcement.
2. Types of Business Entities
The main corporate structures available include:
Sociedad Anónima (S.A.) — Stock Corporation
Share capital divided into shares.
Suitable for larger companies.
Sociedad por Acciones Simplificada (S.A.S.) — Simplified Stock Corporation
The most popular corporate form due to its flexibility.
Single or multiple shareholders.
Limited liability.
Flexible governance structure.
Sociedad Limitada (Ltda.) — Limited Liability Company
Shareholders' liability limited to their contributions.
Shares are not freely transferable.
Sociedad en Nombre Colectivo — General Partnership
Sociedad en Comandita Simple — Limited Partnership
3. Incorporation Process
Draft and sign bylaws (estatutos sociales).
Register with the Chamber of Commerce (Cámara de Comercio).
Register tax identification (RUT) with the DIAN (Tax Authority).
Obtain necessary licenses or permits.
4. Corporate Governance
Companies must appoint a legal representative and a board of directors (depending on company type and size).
Annual general meetings (AGMs) are required.
Reporting obligations include submitting financial statements and tax returns.
5. Shareholder Rights and Responsibilities
Shareholders have limited liability up to their capital contribution.
Shareholders can participate in profits via dividends.
Rights to vote in shareholders’ meetings.
6. Taxation
Corporate income tax rate is generally 35% (as of recent updates, subject to change).
Additional taxes: VAT (19%), withholding taxes on dividends.
Colombia has signed many double tax treaties.
7. Labor and Employment Law
Labor relations regulated by the Colombian Labor Code.
Companies must comply with employee benefits, social security contributions, and labor rights.
8. Insolvency and Bankruptcy
Regulated by the Insolvency and Reorganization Law (Law 1116 of 2006).
Allows for restructuring or liquidation under judicial supervision.
Summary
Colombia offers a flexible and modern corporate legal framework, with the Sociedad por Acciones Simplificada (S.A.S.) as the most widely used form due to ease of formation and limited liability protections. Corporate law focuses on protecting shareholder rights, clear governance, and compliance with regulatory and tax obligations.
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