Simplified Stock Corporations in Colombia

Simplified Stock Corporations in Colombia

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 political reality.

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.