Through Official Letter 220-038971 dated May 19, 2025, the Superintendency of Companies responded to an inquiry regarding the rules for profit distribution that stock companies must follow, specifically in corporations (sociedades anónimas
On this occasion, the Superintendency took into account Articles 150, 151, 155, 190, 451, 454, and 455 of the Commercial Code, as well as Constitutional Court Ruling C-707/05 and several opinions previously issued by the same entity in past years.
Based on legal provisions and the jurisprudence of the Constitutional Court, the Entity reiterated that, for the distribution of profits, the decision adopted by the general shareholders' meeting must, in principle, be approved by at least 78% of the shares represented at the meeting, corresponding to the qualified majority referred to in Article 155 of the Commercial Code. With this majority, the meeting may decide to distribute all profits, distribute a portion, or refrain from distributing the profits from the fiscal year.
Now, in the event that the qualified majority is not obtained, the company must distribute at least 50% of the profits from the fiscal year, unless the legal, statutory, or occasional reserves exceed 100% of the subscribed capital, in which case the minimum percentage of profits to be distributed will increase to 70%.
It must be taken into account that if the shareholders’ meeting approves the profit distribution without the required 78% qualified majority, such decision is rendered absolutely null and void.
Additionally, it is important to note that, for the distribution of profits—whether by qualified majority decision or by simple majority subject to the mandatory minimum distribution of 50% or 70% of the annual profits—accurate and reliable financial statements reflecting the accounts of the period must first be presented.
Likewise, losses from previous fiscal years that affect the capital must have been offset, and the legal, statutory, and, if applicable, occasional reserves must have been funded. Appropriations for tax payments must also have been made. The above is based on Articles 151 and 451 of the Commercial Code.
In conclusion, the Superintendency makes clear the obligation to distribute profits when the general shareholders' meeting has not approved an agreement with the qualified majority of 78% of the shares. This doctrine reflects the intention to protect the interests of minority shareholders and, at the same time, supports the position that profit distribution is the means by which the purpose of the shareholders—to obtain economic benefits from the corporate contract—is fulfilled, as stated by the same authority in Official Letter 220-081667 dated June 26, 2013.
It is important to add that, for Simplified Joint Stock Companies (S.A.S.), the regulation of profit distribution and its restrictions depends exclusively on what is established in the bylaws. Law 1258 of 2008 is very clear in Article 38, stating that the prohibitions contained in Articles 155, 185, 202, 404, 435, and 454 of the Commercial Code do not apply to S.A.S. companies, unless otherwise provided in the bylaws.
However, in the absence of a statutory provision, by normative reference, the rules applicable to corporations and the general provisions of the Commercial Code shall apply to all matters that are not contradictory.
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