Corporate Obligations: Ordinary General Meeting in March

In accordance with Article 422 of the Colombian Commercial Code, commercial companies have the legal obligation to hold an ordinary meeting of their general assembly of shareholders or board of partners at least once a year. This meeting must take place within the first three (3) months of the calendar year, establishing March 31 as the maximum deadline for its execution.

The primary purpose of the ordinary meeting is to examine the comprehensive situation of the company, determine economic guidelines, consider the state of accounts for the last fiscal year, and adopt the necessary measures to ensure the proper fulfillment of the corporate purpose.

According to current regulations, during this session, the following mandatory matters must be addressed and submitted for consideration:

  • Management Report: The administrators (legal representative and, if applicable, the board of directors) must present a detailed report on the evolution of the business, as well as the legal, economic, and administrative situation of the company.
  • Year-End Financial Statements: General-purpose financial statements, duly certified and audited, cut off as of December 31 of the immediately preceding year, must be presented, examined, and approved.
  • Statutory Auditor’s Opinion: For companies required to have this figure, it is imperative to read the statutory auditor’s opinion and reports regarding the financial statements.
  • Profit Distribution Project: The project for the distribution of generated profits must be submitted for consideration or, if applicable, proposals to offset the losses of the fiscal year.

It is essential to guarantee compliance with the right of inspection of the shareholders or partners, which allows them to examine the company’s books, vouchers, and other documents within fifteen (15) business days prior to the meeting (unless the bylaws of Simplified Joint Stock Companies – SAS provide a different term).

Failure to convene, omission in holding the meeting within the legal term, or violation of the right of inspection can result in administrative sanctions by the Superintendency of Corporations (Superintendencia de Sociedades) and affect the validity of the decisions adopted.

At BéndiksenLaw, we recommend that companies initiate the preparation of accounting, financial, and management information in a timely manner, and make the calls for meetings in strict compliance with current statutory and legal deadlines. Contact us to receive specialized counsel and ensure regulatory compliance in holding your ordinary meeting.

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.