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1.1.1.2. Specific Constraints of Available Legal entities

SAS

As mentioned before, SASs cannot be listed on the Colombian stock exchange market.

SA

SAs require a minimum of 5 shareholders, none of which is allowed to have 95% or more of the outstanding shares of the company.

LLC

LLCs must have a minimum of 2 and a maximum of 25 quota holders.

Activities Restricted to Specific Types of Legal Entities

There are certain activities which must be performed by specific legal entities pursuant to Colombian law:

  • Financial institutions such as banks, stock market brokers, fiduciary entities and others, must be incorporated as Stock Companies (SA). This is also the case of insurance companies.
  • Private surveillance and security companies must be incorporated as Limited Liability Companies (LLC). Nevertheless, if a corporation dedicated to these activities was incorporated before 1994 under any other available type of vehicle, it is allowed to maintain its original structure.
  • Furthermore, quota holders of private surveillance and security companies must be Colombian individuals.
  • Companies dedicated to provide domestic public utilities must be incorporated as share corporations.
  • Port administration companies must be incorporated as SAs.
  • Even though it is not mandatory, foreign corporations dedicated to industries such as oil, gas, mining and hydrocarbons service companies, are usually organized in Colombia as Branches of foreign legal entities. This type of vehicle may apply for a special exchange regime which allows receiving payments abroad in foreign currency without the obligation of returning such funds to Colombia.

Furthermore, foreign corporations who plan to enter into agreements which involve state contracting, or that require evidencing experience and capacity (financial, operational, and others), generally incorporate in Colombia a Branch of Foreign Corporation. In this way they can evidence the capacity and experience of their home office (this is not possible to evidence with any type of available corporation).  

Minimum Capital Restrictions

No minimum startup funds are required to incorporate any of the above mentioned legal entities. However, there are certain types of businesses of regulated markets that require minimum startup funds, such as private surveillance and security companies, transportation companies, and banks.