Understanding the difference between Business Establishments and Commercial Premises

Recently the Colombian Superintendence of Companies recalled in Opinion 220-012850 of 2023, that the concepts of business establishment and commercial premises are different although they are usually confused. The superintendence affirmed that according to the provisions of the Colombian Commercial Code, business establishments are a set of goods organized by the entrepreneur to carry out the purposes of the company. That is, they are made up of the things, objects or goods that entrepreneurs use to carry out their commercial activity, such as, for example, the trade name, the brands of the products or services, the furniture or the facilities. On the other hand, commercial premises are the physical space in which business establishments operate, that is, it is the place where the merchant offers goods or services, such as points of sale or stores. It is for this reason that there is no limit to the number of business establishments that can operate in the same place. However, each of these establishments must be duly registered in the commercial registry.

Additionally, the Superintendence recalled that those business establishments that are opened by a company for the development of their businesses and that are managed by proxies who have the power to represent the company, will receive the name of branches. On the other hand, if business establishment managers do not have the power to represent the company, they are considered agencies.

In case you have doubts about it, please contact us.

Meet BéndiksenLaw Colombia’s New Head of Tax

Seeking to provide a more complete and comprehensive service to our clients, we are proud to announce that our founding partner, Jaime G. Béndiksen, will head the Tax Practice area of ​​our Colombia office. Throughout his more than 50-year professional career, Mr. Béndiksen has accumulated extensive experience in the tax law area, advising a wide variety of clients in Colombia, Mexico and the U.S. which is why we are confident that his appointment will allow us to further strengthen and consolidate our office in Colombia. For this reason, we present his resume below:

Education

Mr. Béndiksen graduated in 1970 from Universidad Nacional Autónoma de México (Mexico City), receiving an LLB, also received a Masters in Comparative Jurisprudence (diploma) from New York University in 1974 and a JD from ICFES in Colombia in 1982.

Jurisdictions

Admitted to practice in Mexico and Colombia (South America).

Practice

Practiced with the law firm of Baker & McKenzie from 1970 through 2011, elected international partner in 1977.  With this firm he practiced from 1978 through 1992 in Colombia.

Founding partner of BéndiksenLaw.

Practice Areas

Mr. Béndiksen has over 50 years of experience in Mexican and Colombian tax law in general, with emphasis in tax treaties, competent authority proceedings, international tax planning, supply-chain restructuring, oil exploration, production and services, taxation of software, wealth management, mergers and acquisitions, permanent establishments, cross-border transactions, transfer pricing, employee stock plans and value-added tax.  In tax litigation he has secured landmark decisions on complex tax issues, overturning previous tax court positions.

Public Service

Advisor to the Colombian Tax Administration (DIAN) in 2000-2001 to introduce transfer pricing in Colombia, illustrating the DIAN on this area of tax law and its benefits of the system, drafting the first statutory provisions, drafting the bill submitted to Congress and persuading Congress of the benefits to Colombia in approving the system.

Expert Witness

Has acted as an expert witness on Mexican tax law for the US Internal Revenue Service (IRS).

Also acted as expert witness on Mexican tax law in a US arbitration proceeding between two US multinational entities.

Coordinating Counsel for Multinational Clients

Mr. Bendiksen has extensive experience serving as coordinating counsel for multinational clients, first as Head of the Tax Practice Group at Baker & McKenzie Mexico, and, since 2011, at BéndiksenLaw.

Publications

Writes widely on domestic and international tax topics.  Among many other publications, Mr. Béndiksen:

  • Wrote the Colombia/Mexico national reports for the International Fiscal Association Annual Congresses in Amsterdam (1988), Delhi (1997) Mumbai (2014).
  • Has published several pieces in the Colombian Tax Law Institute Magazine (Revista del Instituto Colombiano de Derecho Tributario).
  • Has written two reports for the Colombian Tax Law Institute (Instituto Colombiano de Derecho Tributario) Annual Tax Law Conferences. 
  • Co-authored the section on Mexico in CCH’s “International Transfer Pricing Laws”. 
  • Directed and co-authored CCH’s “Mexican Tax Guide”. 
  • Was the editor of “Practical Mexican Tax Strategies” published bi-monthly by World Tax Executives, Inc./Thomson Reuters. 
  • Co-authored the Mexico country profile for the Global Tax Guide, published by BNA International.
  • He is a correspondent in Mexico for Tax Notes International.

Presentations

Frequent speaker at local and international fora, on domestic and international tax matters, including:

  • American Bar Association.
  • Asociación Nacional de Industriales (ANDI).
  • Bloomberg BNA.
  • Bogota Chamber of Commerce.
  • Calgary Oil.
  • Canadian Tax Foundation.
  • Colombian Tax Law Institute (Instituto Colombiano de Derecho Tributario).
  • Council for International Tax Education.
  • D. C. Bar.
  • Executive Enterprises Institute.
  • International Fiscal Association, Annual Congresses of Amsterdam (1988), Delhi (1997), Uruguay (2012).
  • Petroleum Equipment Suppliers Association.
  • The Society of Trust and Estate Practitioners (STEP).
  • Tax Executives Institute.
  • Universidad de los Andes.

Recognitions

  • Consistently listed in the Guide to the World’s Leading Tax Advisers, published by Euromoney Publications of London. 
  • Ranked regularly as a leading advisor on Mexican tax matters in the annual poll of 1000 corporate tax directors conducted by International Tax Review.
  • Named as one of the top tax lawyers in Latin America by Latin Lawyer.
  • Recognized as a leading individual on cross-border structuring matters by International Tax Review. 
  • Recognized as “Tax Advisor of the Year” by “Defensa Fiscal”, a specialized Mexican tax publication, in 2005.
  • Recognized regularly by Chambers & Partners in its Global Guide as one of the best tax lawyers in Mexico, dubbing him as “a phenomenal tax lawyer, especially in consulting and litigation”, adding “He is a leader in the field and ‘highly skilled and responsive’ according to clients”.   
  • Regularly listed by Who’s Who Legal, published by Law Business Research, Ltd.
  • Listed yearly as a recommended lawyer by PLC Which Lawyer?
  • Regularly ranked as a Top Tax Lawyer in Mexico in Chambers Latin America Guide.
  • Chambers and Partners top 5% of lawyers globally.

Memberships

  • Member of the International Fiscal Association (IFA), where he was President of the Colombia chapter. 
  • Member of the Precedents and Legislation Committee of the International Fiscal Association (IFA), Mexico Branch.
  • Member of the Transfer Pricing Committee of the International Fiscal Association (IFA), Mexico Branch.
  • Honorary member of the Colombian Institute of Tax Law (Instituto Colombiano de Derecho Tributario) since 1992.

Languages

Spanish, English, Italian

In case you need legal counsel on tax matters, do not hesitate to contact us.

FAQ: Teleworking, Working from Home and Remote Work

Currently, the hiring of workers who carry out their functions through information and communication technologies (“ICT”) has become popular. For this reason, the Colombian Ministry of Labor has regulated the different types of distance work agreements so that both employers and workers know their rights and comply with their obligations. Here we tell you what these types are and answer the most frequently asked questions about them: 

1. What does each of these types of distance labor agreements consist of?

  • Work-from-Home: This is an occasional, temporary and exceptional authorization that employers grant workers to perform their duties from home due to extraordinary circumstances that are expected to be overcome in time. It does not imply a modification or affectation of workers’ rights and guarantees or to the labor conditions agreed upon at the beginning of the labor relationship. This authorization may be granted for a maximum of six (6) months, unless the circumstances that gave rise to the authorization to work from home persist, in which case it will remain in force until such circumstances disappear.
  • Teleworking: Workers perform their functions using information and communication technologies (“ICT”) as support, so their physical presence at a specific workplace is not required. This type of agreements authorize three (3) types of teleworkers:
    • Autonomous: when workers use their own home or somewhere other than the place of business, previously agreed upon with their employers, and sporadically go to the company’s place of business.
    • Mobile: When workers relie on the use of mobile technological devices, but do not have a fixed workplace and occasionally go to the company.
    • Supplementary: Depending on the need for the service, workers work either from their house or from the company’s place of business.

  • Remote work: It is a form of performance of labor contracts in which ICTs or other similar means are used. That is, employers and workers do not interact physically since all stages of the contract are performed virtually. However, exceptional situations may be agreed upon in which the physical presence of workers in the workplace is required.

2. So how are they different?

The main difference is that work from home is the authorization granted by employers to workers to carry out their functions from home due to an extraordinary situation. Thus, it is a temporary authorization, so that once this extraordinary situation is overcome, workers must return to their place of work. On the other hand, remote work is completely virtual and there is never physical contact between employers and workers except in special circumstances. Finally, teleworking involves the provision of the service through technological means, but with the possibility that workers occasionally go to the workplace according to the company’s needs.

3. Must they be in writing?

Yes. For the authorization to work from home, a written notice by employers of the authorization given to workers is sufficient. That is, modification of the initial agreement or entering into a new one, is not required. However, this written notice must include certain information such as the situation that allows this authorization to be granted, the term of duration, the functions that workers must perform, among others. In the case of teleworking and remote work, it is necessary that employment contracts clearly indicate the chosen type of modality along with all conditions, obligations and rights that the parties will have. Thus, in the event that the initially agreed upon modality of work is to be changed, the original employment contracts must be modified. 

4. Is the right to disconnect recognized in all three types of agreements?

Yes, employers have the obligation to recognize workers’ right to disconnect from work in order to guarantee respect of their free time and breaks, so that workers can fully enjoy these spaces and reconcile personal and family life with work.

5. What is the digital connectivity aid?

It is a change in the destination of the legally mandated “transportation aid” for those workers who are temporarily enabled to work from home, in order to facilitate access to the connectivity services they require to continue performing their work from their residences. Thus, workers who earn up to two (2) legal monthly minimum wages (SMLMV, by its Spanish acronym) and who are entitled to the payment of “transportation aid”, will receive this payment as a digital connectivity aid during the time they provide their services under the authorization to work from home (article 10, Law 2088 of 2021).

6. Is it mandatory to recognize the digital connectivity aid in all three modalities of distance work?

No, as mentioned above, this aid should only be recognized for workers who: (i) earn up to two (2) SMLMV, (ii) are entitled to “transportation aid”, and (iii) are carrying out their functions under the temporary and transitory modality of work from home.

However, in the case of teleworking, it is possible to establish, by mutual agreement, a compensatory aid for the costs of public services such as Internet, landline and mobile telephony and energy. That is, workers and employers may agree on the recognition of this compensatory aid and its amount, as it is not mandatory. Similarly, in the case of remote workers, the parties are also free to agree on the payment of compensatory assistance, as it too is not mandatory. However, in the event that the aid is agreed upon, the amount may not be less than the value that has been established for the “transportation aid”.

7. Is it necessary for employers to provide workers with work items and tools?

Although employers may provide equipment and work tools suitable for the performance of the contracted functions, it is also possible to agree to workers’ use of their own equipment and tools. Additionally, the parties may agree on a compensatory fee for the use of these tools owned by workers, but it is NOT mandatory.

8. Must any process be carried out before the workers’ compensation administrators?

Yes. For any of the modalities it is necessary to notify the workers’ compensation administrators (ARL, by its Spanish acronym) of the chosen modality, the place where workers will carry out their functions, working hours and the type of risk. Likewise, in case there is any modification in this information, the ARL must also be informed.

9. Must workers be ordered to submit to occupational medical examinations?

Yes. Employers must order occupational medical exams when workers start working in the company, when they leave the company, after a medical leave and also periodically during the employment relationship, to identify workers’ health conditions. These evaluations may be conducted via telemedicine.

10. Is it necessary to have any special regulations in the workplace policy regarding these modalities?

No, the implementation of these modalities does not require an addition or modification to the workplace policies.

11. Must the Ministry of Labor be notified?

Only in the case of teleworking, since employers must inform the Ministry of Labor of the number of teleworkers that the company has, for which a digital form that the Ministry has established must be filled out.

For more information you can consult our entries on teleworking, work from home and remote work or you can contact us.

Reduction of Weekly Working Hours in Colombia

Through Law 2101 of 2021, the gradual reduction of the weekly working day in Colombia was ordered. This reduction, however, does not decrease or negatively affect workers’ salary and / or acquired rights. Thus, the maximum duration of the ordinary weekly working hours was reduced by six (6), from forty-eight (48) hours per week to forty-two (42). This law allows the employer to implement this reduction in the weekly working hours automatically, that is, to reduce all six (6) hours immediately. However, the law also authorizes employers to implement this reduction gradually, as follows:

DateNumber of Hours to ReduceLegal Maximum Working Hours
As of July 16, 2023One (1) hour47 hours per week
As of July 16, 2024One (1) hour46 hours per week
As of July 16, 2025Two (2) hours44 hours per week
As of July 16, 2026Two (2) hours42 hours per week

According to the above, as of July 16 of the current year, it will be mandatory for employers to modify the duration of the weekly working hours of their workers so that it does not exceed a total of forty-seven (47) hours per week. These hours may be distributed in five (5) or six (6) days a week, according to what is mutually agreed between employers and workers, and in all cases one (1) day of rest per week must be guaranteed. However, Law 2101 establishes the following exceptions:

1. Tasks that imply a high risk to workers health in accordance with the provisions of Decree 2090 of 2003, may be subject to a different maximum weekly working hours if the government decides so. However, to date there is no special regulation in this regard, so at present they must be subject to the maximum ordinary weekly working hours of forty-two (42);

2. Adolescents over the age of fifteen (15) and under seventeen (17) years who have authorization to work, may only perform their work during a maximum daytime shift of six (6) hours a day and thirty hours (30) a week and until 6:00 p.m.;

3. Adolescents of seventeen (17) years of age may only work a maximum of eight (8) hours a day and forty (40) hours a week and until 8:00 p.m.;

4. In case of successive work shifts that allow the company to function without interruption every day of the week, the shifts may not exceed six (6) hours per day and thirty-six (36) hours per week;

5. In case of flexible daily shifts, the forty-two (42) hours may be distributed in a maximum of six (6) days a week, with a minimum of four (4) continuous hours and a maximum of nine (9) hours per day without any surcharge for supplementary work.

In case you have doubts about this matter, do not hesitate to contact us.

The Deadline for Providing Information on Beneficial Owners is Extended

The Registry of Beneficial Owners (“RUB”, by its Spanish acronym) is the registry through which corporations or similar structures that do not have legal personality must provide information on their beneficial owners before the Colombian National Tax Authority (DIAN, by its Spanish acronym). In this regard, the DIAN recently issued Resolution 1240 of 2022 by which it modifies the deadline to comply with this reporting obligation, as follows:

  1. The deadline for making this report through the RUB is extended for those already required to comply with this obligation. Thus, although initially the deadline established was September 30, 2022, according to this new resolution the obligation to provide information on beneficial owners may be fulfilled until July 31, 2023.
  2. Corporations or similar structures that do not have legal personality that are created before May 31, 2023 must provide information regarding their beneficial owners no later than July 31, 2023.
  3. Corporations or similar structures that do not have legal personality that are created as of June 1, 2023, must make this initial registration no later than two (2) months following: (i) its registration in the Tax Registry (RUT, by its Spanish acronym), or (ii) their registration in the identification system of structures without legal personality (SIESPJ, by its Spanish acronym), as applicable.

Remember that in the event that this information is not provided, is done erroneously or incompletely or the information previously provided is not updated, the DIAN may impose penalties. If you want more information about this obligation you can consult our blog here or you can contact us.

Is it Possible to Change the Domicile of a Colombian Company to a Foreign Country?

The Colombian Superintendence of Corporations recently resolved a query regarding the change of domicile of a company, specifically regarding the process of “cross-border re-domiciliation”. In this regard, it stated that this process consists of a company that is domiciled in a certain country, changing its domicile to another country without undergoing a liquidation process or merging or splitting-up with a foreign company. In accordance, it stated that in Colombia, national companies, those which have their domicile in the country, do not have the possibility of changing their domicile to a foreign country without carrying out any of the aforementioned processes. That is, there is no possibility to carry out a cross-border re-domiciliation. Likewise, it is also not possible for a foreign company to change its domicile to Colombia without liquidating, merging or splitting-up.

Following the above, the Superintendence stated that, according to Colombian legislation, it is only possible to carry out the company’s change of domicile within the national territory. However, bear in mind that this decision to change the company’s domicile requires a by-laws reform so it is necessary for the highest corporate body (shareholders’ assembly or meeting of partners) to meet and approve it. Subsequently, the reform must be registered in the Mercantile Registry. For this, it is enough for the companies to register the corresponding minute in which the approval of the decision to change the domicile of the company is recorded before the Chamber of Commerce of the domicile of origin. Finally, the Chamber of Commerce will be in charge of transferring the inscriptions that are in its files to the Chamber of Commerce of the new domicile.

If you have any questions, please contact us.

Colombian Superintendence of Corporations Issues a Guide on Conflict of Interest

Recently the Colombian Superintendence of Corporations issued a guide about the conflict of interest in which the directors of a company may be involved and the way in which they must act in case this happens. In this regard, the Superintendence recalls that, according to article 22 of Law 222 of 1995, the following are considered directors: (i) the legal representative, (ii) the members of boards of directors, (iii) the liquidator, (iv) the business manager, and (v) those who, in accordance with the bylaws, perform administrative functions. Additionally, the jurisprudence of this superintendence has understood that the alternates of the aforementioned persons when they act in such a capacity due to temporary or definitive absences of the principals, will also be considered directors. Finally, Law 1258 of 2008 establishes that those persons who are not directors of simplified joint-stock companies but who interfere in management, administration or direction activities of the company, must also comply with the directors’ responsibilities and may be subject to the sanctions applicable to them.

Additionally, the superintendence recalls that the directors’ actions must be governed by the principles of good faith, loyalty and diligence of a prudent businessman and explains each of these concepts. It is for this reason that directors must refrain from participating in activities in personal interest or that of third parties that involve competition with the company, as this would imply a conflict of interest. It is understood that there is a conflict of interest when the directors’ neutrality in decision-making processes may be affected because the interests of the company and those of the director or third parties that they may want to favor concur, as happens in the event that they want to do business with themselves or with companies represented or controlled by their relatives.

In accordance with the above, in the event that directors face a situation of conflict of interest or competition with the company, they must obtain an authorization from the highest corporate body to be able to carry out the intended activity, as long as the interests of the company are not harmed. For this, they must convene this corporate body and present all relevant information so that a decision in this regard can be made. Finally, this authority reiterates that in the event that a director does not refrain from participating in the aforementioned situations, interested parties or the Public Ministry may request: (i) the nullification and voiding of the performed acts, (ii) the restitution of matters to their previous state, (iii) sentencing the director to the payment of compensatory damages, and (iv) the imposition of pecuniary fines or penalties such as the inability to perform commercial activities. Additionally, a court of competent jurisdiction may order the aforementioned measures ex officio, that is, without the request of any interested party being required, when it is evident that these acts were carried out in violation of the directors’ obligations.

In case you have doubts regarding this subject, do not hesitate to contact us.

To download the complete guide (in Spanish), you can click here.

Applications for Registration or Transfer of Distinctive Signs of Business Groups

On August 5, 2022, the Colombian Superintendence of Industry and Commerce (SIC) issued Resolution 51804 of 2022, by which it added provisions related to applications for registration and transfer of distinctive signs of entities belonging to the same business group, to its Single Memorandum. In this regard, it establishes that when the authority carries out the examination of trademark registrability, it must take into account whether the precedents that prevent the registration or transfer of said sign belong to the same business group as the applicant, in which case, registration will not be understood as affecting the rights of a third party. (In this regard, bear in mind that there is a business group when: (i) there is a situation of control, that is, the decision-making power of a company depends on the will of another person or persons, and (ii) when there is unity of purpose and direction between members of the business group. Regarding this last requirement, the Colombian Superintendence of Corporations has established that it refers to all companies pursuing the same objective that has been set by the controlling company, without this preventing each of the companies from individually performing their corporate purpose and activities.)

For these cases, the resolution established that applicants have the obligation to inform the superintendence of the business group to which they belong. However, in the event that the applicant is a foreign person, they must provide: (i) a statement signed by the applicant’s legal representative or by any of the legal representatives of the member companies of the business group,  in which the existing unity of purpose and direction is exposed, and (ii) a document issued by the competent authority of the country to which the foreign person belongs, which also specifies the existing unity of purpose and direction among the members of the business group. Finally, it’s important to bear in mind that this resolution will come into force on September 1st of the current year.

In case of doubts, do not hesitate to contact us.

Learn About the New Colombian Regulation on Telework

On July 18, 2022, Decree 1227 of 2022 came into force, which modifies and adds some provisions on teleworking. In this regard, bear in mind that teleworking is a form of work organization that consists of the performance of activities by the worker using Information and Communication Technologies “ICT” as support. Thus, the contact between the worker and the employer occurs through ICT without requiring the physical presence of the worker in a specific place of work. Additionally, there are three types of teleworkers: (i) autonomous, when teleworkers use their own home or a different place agreed upon with the employer and only sporadically go to the company; (ii) mobile, when they do not have an established workplace and use mobile devices to perform their functions; and (iii) supplementary, when depending on the needs of the service, they work two (2) or three (3) days a week at home and the other days they work in the company. With this in mind, below we detail the modifications that you must take into account as an employer if you want to implement this type of employment contract in your company in Colombia:

  1. In the employment contract employers must indicate the necessary conditions for the performance of the functions assigned to the worker, the technological means required, the description of the equipment and computer programs and the responsibilities regarding the custody of work items and restrictions and responsibilities that the breaches of these conditions entail. Additionally, it must indicate the modality of telework that will be performed, the weekly working schedule that teleworkers will have, the security measures that they must know and comply with and the description of the minimum requirements in terms of ergonomics and technology that the workstation must comply with. Finally, the employment contract must indicate the procedure that teleworkers must follow to return the equipment that was delivered to them once the telework or contract ends.
  2. The previous requirement to include in the Internal Work Regulations (RIT, by its Spanish acronym) the special conditions for teleworking to operate and the provisions related to the proper use of equipment, programs and information management applicable to these workers, has been eliminated.
  3. The following obligations are established for employers: (i) affiliate teleworkers to the Labor Risk System and inform the workers’ compensation administrators (ARL, by its Spanish acronym) about the chosen telework modality, the weekly working schedule and the corresponding risk class. Additionally, for supplementary and autonomous teleworking, the chosen workplace for the teleworker to carry out their functions must be reported and for mobile telework, the conditions in which the contracted work will be performed; (ii) in the Annual Work Plan of the Occupational Health and Safety Management System (SG-SST, by its Spanish acronym) all the actions considered necessary to identify and control the dangers and risks of the company’s teleworkers must be implemented; (iii) order periodic medical evaluations that may be performed by telemedicine; (iv) adopt and publish a telework policy in which the terms, characteristics and conditions of teleworking are regulated in accordance with the needs and particularities of the service; and (v) inform the Colombian Ministry of Labor about the number of teleworkers that their company has.
  4. Towards teleworkers, employers have the following obligations: (i) inform them of the communication mechanisms they have to report any updates related to the performance of telework, work accidents and occupational diseases; (ii) provide them with adequate work equipment and tools, ensuring that they receive training and information on the risks arising from their use. However, this does not prevent teleworkers from using their own equipment and work tools; (iii) respect human dignity, the right to privacy and access to information of teleworkers; (iv) guarantee the right to disconnect from work and protect the mental health and emotional balance of teleworkers; (v) train them in advance, virtually or in person, in terms of mental health care, ergonomic or biomechanical risk factors, use and appropriation of ICT and digital security; (vi) inform them about the restrictions on the use of computer equipment and programs, protection of personal data, intellectual property, information security and penalties for non-compliance with these provisions.
  5. The possibility that the parties retain the right to reversibility of teleworking is established. That is, the parties may have the power to request at any time the definitive return of teleworkers to perform their functions in person at the company. However, this will depend on what the parties agree to in the employment contract and the possibilities that the employer has to locate the worker within their company.
  6. This decree states that the parties must seek flexibility regarding the time and mode of performance of the teleworker’s functions, provided that the established weekly working schedule is met. For this, the parties will be able to agree on schemes of compliance and monitoring of functions. However, this flexibility cannot affect the effective rest of teleworkers or their right to disconnect from work.
  7. The possibility that the parties agree that the teleworker use their own work equipment and tools is established. In this case, teleworkers must keep their equipment and tools in good functional condition to fulfill their functions and employers must refrain from subsequently requesting equipment other than those agreed upon. The parties can agree on a compensatory amount for the use of these tools, but it is NOT mandatory.
  8. The parties can agree on a monthly aid to compensate for the teleworker’s expenses on Internet, land and mobile telephony and energy. This aid is NOT mandatory and will depend on the will of the parties.

In case you have any doubts, please contact us.

Term to Exercise the Right of Inspection in Simplified Joint-Stock Companies (SAS)

The right of inspection is the authority that associates or shareholders of a company have to examine, the books and commercial papers of the company in which they made their contributions, either directly or through a person authorized for that purpose. This right is intended to allow partners or shareholders who are not part of the management of the company to know about the administrative, financial, accounting and legal situation of the company. Thus, directors of the company have the obligation of allowing partners or shareholders to access this information. Failure to do so is sufficient cause for the competent corporate body or the authorities to remove the directors from their position.

In addition to the above, article 20 of Law 1258 of 2008 establishes that in Simplified Joint-Stock Companies (SAS), shareholders may exercise their right of inspection during the five (5) business days prior to the meeting in which end-of-year balance sheets or transformation, merger or split-up operations must be approved. However, it also establishes the possibility that a higher term can be agreed upon in the company’s bylaws. In this regard, the Superintendence of Companies recently reiterated that it is possible for shareholders to agree in the bylaws to the possibility of exercising the right of inspection permanently. Thus, as established by law, in SAS-type companies the opportunity to exercise this right will depend on what the shareholders have established in the bylaws.

In case you have doubts about it, do not hesitate to contact us.