An organization is a group of people who work together on a set of common goals. If the main objective of the organization is to make a profit from the sale of products and services, it is a commercial organization. This type of organization distributes any income that remains after paying all business expenses to employees and investors or reinvests it in the company.
For the purposes of tax collection, a business organization is an incorporated company. As such, each member of the organization benefits from limited liability protection. In addition, the organization maintains full control over the amount of its earnings that it will retain or distribute to the shareholders. For setting up a company or organization in Colombia, there are different types of commercial companies, in this article we explain more about it.
Know the consequences of not bookkeeping
What is a commercial company?
The commercial company is an alternative that allows various partners to group together and concur in order to carry out commercial activities, industrial production or the provision of services, where the profits or losses of the business undertaken are distributed depending on their participation in the business.
The commercial company is generally a legal entity that is born from a social contract signed by its members, who may be individuals or other commercial companies of different types.
The corporate name of Collective Society is made up of the full name or surname of one of the partners, or the names or surnames of all the partners followed by the expressions “& company”, “& brothers” , “And children” or other similar ones. The company must be made up of at least 2 partners who will have participation and vote to make administrative and managerial decisions. Unlike other companies, in collective companies, all partners have a deciding vote.
It is the scheme most used by medium and large companies. It is incorporated by public deed between five or more shareholders, who are responsible only for their contributions. The capital will be represented in shares of equal value. At the time of incorporation, the authorized, subscribed capital (never less than 50% of the authorized capital) and paid (never less than 33% of the subscribed capital) must be indicated.
Limited Liability Company (Ltda.)
This type of company is set up in a public deed between, at least, two partners and, at most, 25, who respond according to their contributions. It should be noted that in this type of company, capital is divided into shares of equal value. Furthermore, the increase or decrease of the share capital requires statutory reform.
Sociedad en Comandita Simple (S. en C.)
The Simple Limited Partnership is a personalistic partnership, in which collective partners who contribute work coexist and, who may or may not contribute, capital and limited partners who only contribute capital, and which is dedicated to the exploitation of the corporate purpose in a collective name . While the general partners have unlimited liability, the limited partners have limited liability to their contribution.
Sociedad en Comandita por Acciones (S.C.A.)
It is incorporated by public deed between one or more managing partners and at least five limited partners or capitalists. It should be noted that there are two categories of partners: a) groups or managers: they administer the company b) limited partners: they do not intervene in its administration. In addition, the capital is integrated with the capital contributions of limited partners and groups and is divided into shares of equal value.
98% of the companies created in Colombia operate under the SAS model (Simplified Stock Companies). The incorporation of SAS companies is done through a private document, which must be authenticated by those who participate in its subscription. and registered in the Mercantile Registry of the Chamber of Commerce.
These are some of the most notable benefits and features:
- It can be set up with a single partner without specifying the corporate purpose, thus allowing the freedom to exercise functions and define itself in various areas.
- The responsibility of each partner will depend on the contributions they make.
- The company has no obligation to create a board of directors
How to set up a company?
For the incorporation and start-up of a company, be it a company, sole proprietorship or branch, the following steps must be followed: Decide whether to establish a company or a branch. If a company is to be established, it must:
- Choose the corporate type.
- Prepare the documents for the incorporation of the company.
- Obtain the NIT of foreign shareholders through the completion of the Tax Registration (RUT) before the Tax Office – DIAN.
- Raise and / or record in public deed the articles of incorporation of the company or incorporation of the branch.
- Obtain letters of acceptance of company executives.
- Carry out the commercial registry and obtain the Tax Registration of the company or branch through the completion of the RUT before the Tax Office – DIAN.
- Register the company’s books at the Chamber of Commerce. Set up a bank account. Register the foreign investment in the Banco de la República.
In Colombia, as in different parts of the world, there are different types of societies or companies, which can be formed depending on the needs and requirements of their partners.
Normally when creating a company there is this question, what type of company is the most appropriate? Each society has its own characteristics that differentiate it from the others as we have seen. It is recommended that you choose the one that best suits your needs.
Learn about the benefits of accounting in companies.
If you are an entrepreneur and you want to start your business creation process in Colombia, it is important that you take into account both the legal obligations to which you are subject and the protocols to be followed with the different public entities. Although the above sounds a bit complex, our JLC Auditors experts want to share the step-by-step that you must follow so that your business or company meets all the requirements established by law.