Doing business in a country requires the formation of business structures legally registered with the Trade Registry. In this country, there are two main kinds of business structures namely Sociedad Anónima (S.A.) and Sociedad por Acciones Simplificada (S.A.S.). The formation of the latter popularly known as a simplified crock company is backed by the Colombian Commerce Code, book 2, Law 222/1995 and Law 1258/2008. A SAS has a legal personality and an indefinite period of existence. The S.A.S. is mainly governed by its bylaws stated in a private document, the Colombian Commerce Code and Law 1258. The liability of shareholders is limited to the number of their shares contributed. The governing bodies of the entity are the General Assembly of Shareholders (Asamblea General de Accionistas), a Board of Directors (Junta Directiva), and a Legal representative (Representante legal). The company is allowed to have at least one shareholder during incorporation. It may not be publicly listed or used for a non-profit organization.
If you are considering forming a company here or you are a foreign company thinking of expanding to this country, this guide provides information on how to register a simplified crock company in Colombia and the process to take.
Features of the company
SASs are allowed to be incorporated by a single shareholder with no residency requirements for any foreign shareholder. They must have at least one legal representative, but having a board of directors is not compulsory. However, if it exists, it has to have no less than one member. Though there is no minimum capital amount required, the subscribed capital and any new issuance of shares have to be paid within two years after the incorporation. The purpose of the company must be stated in its bylaws. Executing the public deed for the incorporation can be done under a power of attorney, as there is no requirement for the physical presence of the directors or legal representatives.
The process of incorporation
The Unique Commercial and Social Registry (Registro Único Social y Empresarial) under the Chambers of Commerce is the body tasked with registering new entities within this territory. The following documents have to be filed with the Cámara de Comercio during incorporation:
- A public deed containing the bylaws
- Proof of existence and representation of the shareholder
- Pre-registry tax form
- Chamber of commerce forms
- Letters of acceptance from the legal representatives and members of the board of directors
Note that the shareholders or attorneys must sign the public deed for the incorporation and the bylaws. However, a foreign shareholder must submit duly notarised proof of their existence. A tax identification number (NIT in Spanish) is required before starting a business, thus, a Pre-Tax Registry Form (Pre-RUT) has to be filled out with the Chamber of Commerce during incorporation. If the Chamber of Commerce does not assign an NIT, you can obtain it 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 company
- Commercial and judiciary e-mail
- Public deed for the incorporation
- Tax identification number
- Details of the paid share capital
- Details of shareholder
- Name of Legal Representative, etc.
Timeline of the process
Once the documents are filed, the Chamber of Commerce (Cámara de Comercio) will issue a proof of incorporation within five business days.
Cost of the process
The costs of the procedure mainly include the registration fees payable to the Chamber of Commerce (Cámara de Comercio), the registry tax, which is 0.3 percent to 1 percent over the capital based on the jurisdiction, and the notarial fees for the public deed.
