On December 16, 2024, Bill No. 467/2024C was submitted to the Congress of the Republic, through which "The Commercial Code is amended to establish rules regarding merchants and companies, and other provisions are adopted." .
This legislative initiative, which is currently under review by the First Standing Constitutional Committee, aims to make the existing regulations more flexible in order to encourage business formalization, promote economic activity, and, more broadly, modernize the corporate regime.
The following are the key topics in the Bill:
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- Limitation of liability for individual (natural person) merchants: A mechanism is proposed through which merchants can, without incorporating as a legal entity, limit their liability to the declared assets in order to protect personal property not related to commercial activities.
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- Creation of structures derived from the SAS (Simplified Joint Stock Company): The creation of Sports Simplified Joint Stock Companies (SASD) is proposed, with the aim of requiring professional clubs to adopt this corporate form for the purpose of conducting economic activities related to the clubs but separate from sports, such as the training and negotiation of economic rights over professional athletes between clubs, among others. Clubs would no longer operate as non-profit entities.
Additionally, the Simplified Joint Stock Company of the Archipelago of San Andrés and Providencia is proposed, which will be able to operate throughout the national territory and will have the tax benefits granted by law (not specified)
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- Strengthening of equity and mechanisms for the protection of minority shareholders: Mechanisms are proposed to prevent the abuse of corporate law against minority shareholders and to strengthen the economic structure of companies in order to achieve greater stability in their operations.
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- Expansion of the powers of the Superintendency of Companies: The bill proposes to expand the jurisdictional authority of the Superintendency to address conflicts regarding the application and interpretation of corporate law regulations in SAS, and adds certain oversight and sanctioning powers.
It includes special provisions to exclude certain specific matters from the administrative sanctioning procedure established in the Code of Administrative Procedure and Administrative Litigation, which continues to be the governing regulation for the general aspects of the process.
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- Promotion of technological modernization: The efficiency of commercial registration and enrollment processes is promoted, particularly the simplification of procedures for the formation, amendment, and dissolution of companies, with the aim of reducing transaction costs.
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- Creation of corporate arbitration: One of the most important innovations of the bill is the creation of arbitration for the resolution of corporate disputes. This proposal aims to allow all matters related to the formation and operation of companies to be submitted to arbitration, enabling the parties to freely agree on the procedure applicable to the dispute.
Among other things, the duration of the process is regulated, which may not exceed 120 days counted from the day following the acceptance of the arbitrators’ appointment to the issuance of the award. This period may not be extended by more than 60 days. The possibility of waiving the review appeal by mutual agreement, either before or during the process, is also established, which is a novelty compared to the arbitration regime of Law 1563 of 2012. Confidentiality of the arbitration process is likewise guaranteed
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- Reforms to the regime of administrators: Several modifications are proposed to the regime of administrators regarding their duties, liability regime and corresponding actions, conflicts of interest, as well as the reimbursement of defense expenses for an administrator who has prevailed in litigation against the company.
This reform, according to the legal drafters of the bill, is considered an opportunity to correct the regime of administrators, which was not properly regulated in Laws 1258 of 2008 and 222 of 1995.
We will keep track of any updates regarding the progress of the bill.
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