To carry out business activities within a territory, one has to establish a business entity legally registered with the Public Registry. There are two common entities here namely Sociedad Anónima (S.A.) and Sociedad por Acciones Simplificada (S.A.S.). The formation of SA known as a corporation is authorized by the Colombian Commerce Code, book 2, Law 222/1995 and Law 1258/2008. A SA has a legal personality and a duration of existence. The company is governed by the bylaws in its articles of incorporation. Shareholders’ liability is limited to the value of their shares. The governing body is the General Assembly of Shareholders (Asamblea General de Accionistas), while it is managed by a Board of Directors (Junta Directiva). An S.A. is required to have at least five shareholders throughout its existence. It can be publicly listed or held but not used for a non-profit organization
If you are considering forming a corporation here or you are a foreign company thinking of expanding to this country, this guide provides information on the registration of a corporation in Colombia and its process of incorporation.
Features of the corporation
SAs have to be incorporated by at least five shareholders. There are no residency requirements for foreign shareholders. They must have at least one legal representative and an alternate, with a board of directors having no less than three members with alternates. Though there is no minimum capital amount required, at least a third part of the subscribed capital must be paid at incorporation. The purpose of business has to be in the bylaws. Executing the deed for the incorporation can be done by virtue of a power of attorney, as there is no requirement for the physical presence of the directors.
Types of shares
The types of shares allowed to be created in a corporation include ordinary shares, preferential shares without voting rights, and privileged shares.
The process of incorporation
The Unique Commercial and Social Registry (Registro Único Social y Empresarial) under the Chambers of Commerce is the registering body for new entities within this territory. The following documents have to be filed with the Chamber of Commerce (Cámara de Comercio) for incorporation:
- Public deed with the bylaws
- Documents showing the existence and representation of the shareholders
- Pre-registry tax form
- Chamber of commerce forms
- Acceptance letters of the legal representatives and members of the board of directors
Note that the shareholders or attorneys can sign the public deed for the incorporation and the bylaws. If the shareholders are foreign companies, proof of their existence must be duly notarized. A tax identification number (NIT in Spanish) is required before the commencement of business activities. To do this, a Pre-Tax Registry Form (Pre-RUT) should be filed with the Chamber of Commerce during incorporation. If the Chamber of Commerce does not assign an NIT, obtain it directly from the Tax Authority.
Information to be provided during the incorporation
The information below shall be filed at the Trade Register (Registro Mercantil) and is publicly available:
- Purpose of corporate
- Activities of the corporate
- Commercial and judiciary e-mail
- Public deed for the incorporation
- Bylaws and their amendments.
- Name of corporate
- Tax identification number
- Commercial and judiciary address and telephone.
- The authorized, subscribed, and paid share capital information
- Board of directors’ names and faculties.
- Name of Legal Representative, etc.
Timeline of the process
After filing the documents, it takes the Chamber of Commerce (Cámara de Comercio) five business days to issue proof of incorporation.
Cost of the process
Costs associated with the procedure consist mostly of registration fees payable to the Chamber of Commerce (Cámara de Comercio), the registry tax, which ranges from 0.3% to 1% of the capital depending on the municipality, and notary fees for the public deed.
