COLOMBIA Law and Practice Contributed by: Clare Montgomery, Karen Santamaria, Catalina Garzón and Diana Guerrero, Baker McKenzie S.A.S.
5.2 Role of Shareholders in Company Management Shareholders do not generally hold a manage - rial position solely because of their status as shareholders. However, they can be appointed to management positions as there are no legal provisions prohibiting this. Apart from cases of legal representation, the administrators and employees of the company may not represent shares, other than their own, at the meetings of the board of partners or the shareholders’ assembly of corporations or lim - ited liability companies, while they are in office, nor may they substitute the powers conferred upon them. They may also not vote on the bal - ance sheets and accounts at the end of the fiscal year or on the liquidation accounts. 5.3 Shareholder Meetings The shareholders or partners must hold an annu - al meeting within the term set out in the by-laws. Where no provision is made, the meeting must be held within the first three months of each cal - endar year. The matters to be considered at the annual meeting include the: • appointment of directors, officers and statu - tory auditor; • approval of the annual management report; • approval of the statutory auditor’s opinion on the annual financial statements; • approval of the annual financial statements; and • approval of the project for the distribution of profits. 5.4 Shareholder Claims The company responsibility action ( acción indi- vidual de responsabilidad ) may be initiated when acts of the administrators (members of the board of directors, officers) caused specific damage to
The remaining two-thirds must be paid within a year of incorporation. Liability is limited to the capital contribution in the absence of fraud or abuse. Limited Liability Companies (Ltdas) The partners’ responsibility is limited to the amount of the capital contribution, which must be paid in full when the company is incorporated and on any additional increase, partners are not liable for the payment of any debt, except for tax obligations or labour liabilities, for which they are severally and jointly liable with the company and share capital that has not been fully paid. Branches of Foreign Companies Assigned capital must be fully paid. Any increase requires authorisation of the home office’s com - petent corporate body and registration in the Trade Register. Supplementary investment to assigned capital does not require any formalities and can generally be made in cash from abroad. A branch does not have a separate legal person - ality to that of its home office. The home office is liable for the assets and liabilities of the branch in Colombia. The home office and the branch are jointly and severally liable for all business conducted in Colombia through the branch, including the tax and corporate obligations of the branch, without limitation. In addition, the shareholders are in charge of approving by-law amendments, setting eco - nomic guidelines for the business and policies for the management of the company, starting corrective actions against the management and making decisions on the profits. These decisions are usually made following the quorum set out in the law or the by-laws for these matters.
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