COLOMBIA Law and Practice Contributed by: Jaime Trujillo, Juan David Velasco, Natalia Ponce de León and Angelica Navarro, Baker McKenzie S.A.S.
SAS Benefits and most common uses
SA Benefits and most common uses
The SAS offers greater flexibility than other types of corporate vehicles in Colombia. Its incorporation pro - cess is simple, there are fewer administrative require - ments, and shareholders have greater freedom to determine operational terms and internal structure. The SAS is used for almost any business (except those that, by law, require a corporation). Incorporation process An SAS can be incorporated by a private document registered with the relevant chamber of commerce or by public deed (if assets contributed for the incor - poration of the SAS require transfer by means of a public deed, such as real estate assets, the SAS must be incorporated by means of a public deed granted before a Colombian notary public). Term The term can be indefinite. Number of partners/shareholders An SAS must have a minimum of one shareholder, and there are no limits on how many shares they can hold. There is also no limit on the maximum number of shareholders. Liability Liability is limited to shareholder contributions, except in situations involving company fraud or abuse that harms third parties. Capital requirements Shareholders have a maximum term of two years from incorporation to pay for the subscribed shares. Governance The shareholders of an SAS appoint managers responsible for the company to represent it before third parties (called legal representatives). Although the SAS may have a board of directors, it is not a requirement. Other relevant matters The SAS does not need a legal reserve, and a statu - tory auditor is only required if their profits are above 3,000 minimum monthly wages.
A corporation or SA offers a more traditional structure. Its shares can be registered and traded on the national stock market. Banking institutions and listed compa - nies must be corporations by law. Incorporation process An SA can only be incorporated by a public deed granted before a Colombian notary public and regis - tered with the relevant chamber of commerce. By-law amendments would have to be formalised by public deed. Term The term must be limited but may be extended by the shareholders. Number of partners/shareholders There must be a minimum of five shareholders in an SA. Under Colombian law, no shareholder may have 95% or more of the outstanding capital of the corpo - ration. Liability Shareholder liability is limited to the amount of their contributions. However, in cases of fraudulent actions, overvaluations of contributions in kind and wilful mis - conduct, or actions of a parent company giving rise to the bankruptcy of an affiliate, the liability of sharehold - At the moment of incorporation, shareholders have to subscribe to at least 50% of the authorised capital and make an initial payment of at least one third. The balance must be paid within one year from the date of incorporation. Governance An SA must have a board of directors. This must con - sist of at least three members and their alternates, as well as a legal representative. Other relevant matters An SA must have a legal reserve and statutory auditor. ers could be extended. Capital requirements
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