by Luisa Fernanda Mantilla Verdooren
Every day there are more
reasons for foreign investors to pay attention to Latin America. Colombia
illustrates the present trend toward modern corporate models, demonstrated by
its recent regulations for simplified stock corporations.
During the past ten years, Colombia's predominant policy has been for economic
liberalization, along with the assurance of legal certainty. The considerable
increase of foreign investment in the country confirms the success of this
plan. As the economy and investments have grown, so has the legislature's
awareness for the need to pass laws that accord with the new economic and
The Simplified Stock Corporation
With this in mind, Law 1258, creating the
Simplified Stock Corporation (SAS), was passed in 2008. The SAS has rapidly
become the preferred corporate model in Colombia for both national
entrepreneurs and foreign investors.
The background that allowed for the rise of the SAS in Colombia is based on the
good results of similar corporate models. Originally created in France, this
hybrid corporate form combines the best features of the limited liability
company forms of the Civil Law (France) and of Common Law (Delaware in the
United States of America and the United Kingdom).
One of the SAS's most relevant features is its flexibility. The incorporation
of this type of company, along with its amendments, does not require special
formalities, as was required before 2008. In addition, the new law recognizes
the predominance of contractual independency allowing for corporate governance
that is adaptable to the particular interests and policies of each company.
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Luisa Fernanda Mantilla Verdooren is
an associate lawyer at Cavelier Abogados in Bogotá, Colombia, and a member of
the firm's business law team. Ms. Verdooren's practice focuses on corporate
law, exchange law, and commercial contracts. Prior to joining Cavelier Abogados,
she was legal counsel at Wood Group Colombia S.A., where she managed corporate,
contractual, and immigration matters.