COLOMBIA Law and Practice Contributed by: Clare Montgomery, Karen Santamaria, Catalina Garzón and Diana Guerrero, Baker McKenzie S.A.S.
3.3 Decision-Making Processes The shareholder’ assembly and the board of directors can make decisions by holding in- person or virtual meetings. Decisions can also be made by written ballots provided that all shareholders or all directors participate. In this case, the legal representative of the company must send the necessary information to allow the directors or shareholders to vote and ensure the timing and other legal provisions are met. All decisions adopted in a meeting or by written ballot must be reflected in minutes which must be signed by the individuals authorised for this purpose or the individuals provided for in the law. In principle, decisions of the shareholder’ assem - bly require the affirmative vote of the majority of the shares represented at the meeting. However, the law provides that qualified majorities apply for certain decisions and certain types of enti - ties. For example, simplified stock companies (S.A.S.) require a unanimous vote to modify provisions in the by-laws that: i) restrict the negotiation of issued shares; ii) require prior authorisation of the shareholders’ assembly for the transfer of shares; iii) set out grounds for exclusion of shareholders; and iv) establish arbitration or amicable composition agreement for the reso - lution of corporate conflicts. The conversion of the company into any other type of corporate structure also requires the unanimous approval of the shareholders. Corporations (S.A.), on the other hand, require a qualified majority for decisions such as: i) distri - bution of profits (at least 78% of the shares rep - resented at the meeting); ii) issuance of shares without the pre-emptive right (70% of the shares
Shareholder’ Assembly The shareholder’ assembly is the governing body of the company and is usually responsi - ble for considering annual accounts prepared by the management, appointing directors and legal representatives when the company does not have a board of directors. It is also usually responsible for approving by-law amendments, setting economic guidelines for the business, starting corrective actions against the manage - ment and making decisions on the profits. 3.2 Decisions Made by Particular Bodies General managers must seek to improve a com - pany’s performance and profitability and imple - ment the strategy and vision of the company. They will hire employees, sign contracts (sub - ject to any limitations in the by-laws) and pre - pare financial statements. Additionally, they are responsible for the day-to-day activities. Boards of directors are usually involved in deci - sions concerning budgets, strategic decisions, review of annual accounts, share issues, approv - al of indebtedness, acquisition of relevant assets, appointment of management and authorisations of specific contracts. Boards of directors are not mandatory for all types of companies in Colombia. When a board is included in the by-laws, rules for the issuance of shares, appointment of management and the issuing of authorisations to managers to enter into contracts restricted by a company’s by-laws are decisions usually reserved to this particular body. The shareholder’ assembly adopts all other deci - sions, including approval of all by-law amend - ments, annual financial statements, appointment of officers, including the statutory auditor and considerations of conflicts of interest.
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