Main advantages of the Simplified Joint Stock Company (S.A.S.)
Since December 5, 2008, date in which Law 1258 of 2008 was enacted and came into force, it is possible to incorporate companies under the most recent corporate type within the Colombian legal system: the Simplified Stock Company (SAS).
This is no longer a new legal vehicle and has become the preferred corporate model for the creation of new SAS companies in Colombia. Currently, about 98% of companies are incorporated as SAS; and according to studies by the Superintendence of Companies, by 2018, ten years after the legal creation of this model, 54% of all companies in Colombia were SAS
The advantages of the SAS are numerous, since the law has provided this type of company with great flexibility and has significantly reduced the formalities and requirements necessary for its incorporation.
The main advantages of the SAS are the following:
- The SAS are constituted by means of a private document registered in the Commercial Registry of the Chamber of Commerce of the place where the company establishes its main domicile, unless real estate is contributed, in which case it will be necessary to constitute it by means of a public deed.
- The SAS can be pluripersonal as the other types of companies, but they can also be unipersonal, since a single shareholder will be sufficient to constitute the company.
- The shareholders of the SAS have limited liability up to the amount of their contributions, so they will not have to answer with their personal assets for the social debts, not even labor or tax debts.
- The SAS shareholders can pay their contributions within two years.
- The SAS are the only type of company that can have an undetermined duration and purpose; and in any case they will be of a commercial nature.
- The SAS have a very wide regulatory flexibility. There is the possibility of freely regulating in the company’s bylaws most of the issues related to corporate governance and the quorum and decision-making majorities, among others. There are specific exceptions, but the general rule is that there is regulatory freedom.
- The SAS have as their maximum body the general assembly of shareholders or the sole shareholder.
- The SAS does not have the obligation to have a board of directors, but it may have one if it is submitted to a judgment in the bylaws.
- The SAS is not required to have a tax auditor, unless the gross assets of the previous year are equal to or greater than 5,000 SMMLV or the gross revenues of the previous year are equal to or greater than 3,000 SMMLV.
SAS may issue shares of any type, including preferred shares; non-voting preferred dividend shares; shares with fixed annual dividend and payment shares. This possibility offers a great diversity of participation schemes that can be very interesting both for investors and for the society that needs liquidity.
At Pelaez Restrepo Abogados we are experts in Commercial, Corporate, Tax and Exchange Law. We will be happy to provide you with comprehensive legal advice to help you implement your projects or start your business.