COLOMBIA Law and Practice Contributed by: Clare Montgomery, Karen Santamaria, Catalina Garzón and Diana Guerrero, Baker McKenzie S.A.S.
must be filed with the letter of acceptance and a copy of the appointed person’s identification document. The appointment of the officers will be effective upon their registration at the Trade Register. The members of the board of directors can act as officers if this is accepted. They can do so even if their appointment has not been registered with the Trade Register if their decisions do not require public registration. Legal representatives must obtain a personal tax ID and update the company’s tax ID information. 4.5 Rules/Requirements Concerning Independence of Directors The appointment of independent members is not mandatory for unlisted companies. However, it is becoming more common. Provision for this can be made in the company’s by-laws. Direc - tors and officers should abstain from engaging directly or indirectly in their own interests or the interests of third parties in activities involving competition with the company or acts involving a conflict of interest, unless prior written authori - sation has been provided by the shareholders’ assembly and is therefore not harmful to the company. 4.6 Legal Duties of Directors/Officers The law lists the duties that apply to administra - tors which include: • making all efforts to adequately develop the corporate purpose; • ensuring that the laws, by-laws and duties are strictly complied with; • ensuring that the instructions of the statutory auditor are carried out; and • confidential commercial and industrial infor - mation is protected.
Administrators are required to act in good faith and with due care and loyalty. They are also required to meet the standard of a good busi - nessman. There is a presumption that in making a business decision, the directors of a company acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company. However, corporate administrators enjoy full autonomy when making business decisions and are protected from being held personally liable as long as the decisions do not contravene legal and statutory provisions. This autonomy is com - monly known as the business judgement rule. A company is bound by the acts of officers to the extent that these fall within the powers granted to them under the by-laws of the company and provided that they fall within the corporate pur - pose of the company. 4.7 Responsibility/Accountability of Directors Directors must exercise their duties in good faith, with loyalty and with the diligence of a good businessman. They will act in the interests of the company and take the interests of shareholders into account. Directors will be jointly and unlim - itedly liable for any damage they may cause to the company, its shareholders or to third parties because of fraud or negligence. 4.8 Consequences and Enforcement of Breach of Directors’ Duties The mechanism established by law for directors to repair the damage to the company is known as the company responsibility action ( accion social de responsabilidad ). This is valid in the cases where directors may have caused damage to the company, the shareholders or to third par - ties, in the performance of their duties because
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