Authorities remind companies of the obligation to register corporate control situations

Under Colombian corporate law, there is a situation of corporate control when the decision-making power of a company is subject to decisions by another individual or company. Article 621 of the Colombian Commercial Code establishes three specific cases where there is seemingly a situation of corporate control which trigger the legal duty to register, not only the situation of corporate control itself, but also details of the controlling company or individual such as: name, nationality, economic activities, and the occurrences that resulted in a corporate control situation.

This obligation is not new, however the Superintendence of Corporations issued its External Letter 2021-01-099823 in which it reminds companies of their duty to report corporate control situations or the emergence of  corporate groups, arguing that the two main factors for incompliance with this obligations are the public’s unfamiliarity with it along with its  erroneous interpretation.

Due to this, the Superintendence wishes for this External Letter to be an educational tool, promoting knowledge about these regulations and exhorting the public to comply with this legal obligation. It also reminded the public that the Superintendence of Corporations can impose fines of up to 200 monthly minimum wages for each omission or for each item erroneously registered.

The External Letter contains a chapter on alternative sanctions that consists of attending courses taught by the Superintendence. The length of the course will depend on the severity of the sanction.

If the Superintendence starts an investigation and the company in question wants a reduction of the fine, it will be necessary to accept the charges and comply with the registration or rectification of the information that is requested by the Superintendence of Corporations.

Avoid a possible penalty! BéndiksenLaw can counsel your company regarding registration of corporate control situations or corporate groups.

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Substantial change to the grounds for dissolution of a company

Law 2069 of 2020 – “Law of Entrepreneurship”, brought a major change to the grounds for dissolution due to financial losses that was established for companies based on Article 457 of the Colombian Code of Commerce. This rule has now disappeared in favor of a new concept regulating when a company is considered to be in a ground for dissolution.

The grounds for dissolution for “not complying with the hypothesis of undergoing business” is replacing the grounds for dissolution of financial losses that reduced a company’s equity that was established in the Colombian Code of Commerce. Therefore, a company may have severe financial losses that reduce its equity below 50% of its paid-in capital and not be considered to be in a ground for dissolution, since now the hypothesis of undergoing business prefers subjective and investigative criteria over the objective criterion that was previously established in Article 457.

Under Article 4 of Law 2069 of 2020 a company could undergo a dissolution when, in the foreseeable future, its financial statements reveal facts or conditions that can generate doubt about the continuity of business. Some of these facts could be: (i) high probability of events that risk liquidity, (ii) loss of important clients or suppliers, (iii) identification of obsolescence of products or business models.

If you wish to receive legal counsel for your company regarding the new regulations of Law 2069 of 2020, BéndiksenLaw can provide guidance and counsel in this matter.

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Virtually inexistent protection for personal data

Personal data are economic assets that are bound to people’s personal sphere, which is the reason why they are protected under national and international legislations. In Colombia, companies that collect and use personal data need to do so under certain guarantees enshrined in Law 1581 of 2012. Among these guarantees are the duty of data protection to prevent leakage or use by an un-authorized third party.

The Superintendence of Industries and Corporations conducted its second annual study on the security measures of companies that registered their databases in the National Registry of Databases. It found that of 33.596 companies in the registry, 24.424 do not have the necessary security standards to comply with the legal responsibility of protecting personal data.

This finding constitutes a huge risk for the companies that are not complying with the legal obligation of ensuring the security of gathered personal data. This non-compliance could not only mean legal sanctions but also reputational detriments for the companies, even if there has not been any leakage or threat to the data.

If you wish to know how to protect your company from these risks and build an effective plan to guarantee the safe handling of personal data, BéndiksenLaw is here to help you.

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New Aspects of Payment Reversal

It is undeniable that the increase in virtual transactions in the recent months has triggered multiple violations of consumer’s rights. For this reason, the Superintendency of Industry and Commerce published new guidelines for contractual protection of transactions that are executed on digital platforms.

Through a legal opinion, the administrative authority stated that payment reversal is only applicable in particular circumstances. This is a legal institution established in the Consumer Statute, it consists of the right of consumers to request the return of the transaction to its initial state, as if it had never occurred.

Therefore, payment reversal will be only applicable when: (i) the consumer has been a victim of fraud, (ii) the purchased product is not the same as the one received, and (iii) the transaction was not done by the consumer.

BéndiksenLaw makes your life easier: we can provide you with personalized advice on consumer law issues.

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The maximum date for the renewal of the commercial registry is near

The maximum date to renew commercial registries is on March 31.  This registration is extremely important for merchants and entrepreneurs since, aside from being legally mandated, it has multiple benefits such as commercial visibility, the opening of business opportunities and ease of access to lines of credit.

With the renewal of the registry, the company’s public information, as well as its commercial activities, based on its current line of business and future corporate projections, will be updated. Do you need help? BéndiksenLaw can accompany and advise you in the management of this process.

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4.0 revolution arrives to duty-free zones

Duty free zones are spaces in which the development of commercial, industrial and services activities are performed under special regulations regarding taxation, customs and foreign trade.

With Decree 278 of 2021 certain aspects of the duty-free zones have been modified to generate more competitive spaces with aims of promoting innovative commercial projects that can bring local and regional benefits. The decree aims to: promote e-commerce, boost the export of goods and services, and reduce the requirements and processing times to foster an easier access to these zones by new companies.

Some benefits of Decree 278 are:

  • A decrease on the minimum required investment amount for the declaration and prorogation of duty- free zones.
  • E-commerce on duty-free zones trough postal traffic and urgent shipments.
  • Removes the requirement of a minimum 20-hectare area for new permanent duty-free zones that are dedicated to the rendering of services in municipalities with less than a million habitants.
  • Recognition of intangible assets (in accordance with the current intellectual property regime) as part of investment commitments (up to 20%).

If you wish to know more about how to take advantage of these benefits for your company, BéndiksenLaw can provide legal counsel and guidance regarding this matter.

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New Rules for Corporate Shareholders’ Meetings

Economic and commercial transformations over the last year have left great changes in corporate matters. Colombian regulations have not been indifferent to these changes. The Superintendency of Corporations recently stated new rules for annual corporate shareholders’ meetings.

The resolution of the administrative entity, with its legal basis on Decree 176 of 2021, establishes the applicable rules for shareholders’ and partners’ meetings for the current year. These norms determine deadlines for companies to execute said meetings at the closing of the accounting year.

The deadline to hold pending meetings was consolidated. The maximum date for said meetings, for both accounting year 2019 and 2020, is 31st of March 2021. Do not wait until last minute, BéndiksenLaw can counsel and assist your company in its shareholders’ meeting.

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Guidelines on Best Practices for Corporate Shareholders’ Meetings

Due to the current global health crisis, technology use has increased in previously unthinkable ways. A significant part of corporate productivity and business efficiency is now assisted by digital mechanisms. Calling and executing corporate shareholders’ meetings are no exception. . The Superintendency of Finance published a set of guidelines of best practices for virtual shareholders’ meetings.

The guidelines include sections relating to calling and executing the meeting, as well as instructions for after-meeting matters. The purpose of said recommendations by the administrative authority is to ensure that virtual shareholders’ meetings fulfill all legal requirements.

Considering the complexity and technicality required to execute these important events for companies, such as shareholders’ meetings, avoid future complications and penalties: BéndiksenLaw offers you counsel and support under the latest regulatory guidelines issued by the authorities on the matter.

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Public Notary Services Will Be Provided Online

Public Notaries have assumed the challenge of the digital age, as the traditional way of providing their services comes to an end. The Superintendency of Notaries and Registries issued the administrative acts and technical annexes under which notary services will be provided online from now on.

The administration will enable public notaries who fulfill the technical requirements set forth in the law to execute more than 400 digital procedures. These procedures include marriages, authentications, wills, among others. This represents an important change in day-to-day activities, considering that before users only had one choice: going physically to the notary’s place of business.

Whereas now, there is the possibility to receive notary services online. Procedures will be offered through virtual meetings, technological solutions, and web and mobile access which must provide synchronization, communication and traceability for users.

These three aspects are crucial both physically and digitally and must be applied to all the notary public’s activities. Synchronization between parties refers to electronically signing documents simultaneously. In this way, the will of both parties will coincide with the time during which the process is executed. Also, stable communication must be maintained between the public notary and the interested parties. Finally, traceability refers to keeping an orderly and methodical record that allows reviewing the stored information at a later moment.

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