The process of liquidating a company in Colombia is multifaceted and demands thorough planning, along with expert guidance from specialized advisors. Engaging the services of specialized consultants—ranging from financial to legal and tax advisors—can make the difference between a smooth, efficient process and one fraught with delays and complications.
Whether the liquidation is driven by a going concern assessment or mandated by the provisions of the Commercial Code, adhering to the correct legal and procedural steps is critical for an efficient and compliant dissolution. Below, we outline the key phases involved:
- Board of Directors’ Resolution: The company’s highest governing body must convene to present and justify the rationale for dissolution. During this meeting, a resolution to approve the liquidation is voted on, and the primary liquidator and, if necessary, a substitute, are appointed. The meeting minutes, along with the liquidators’ acceptances, must then be registered with the Chamber of Commerce in the company's jurisdiction. From this point forward, the company’s name must include the phrase "in liquidation.", Consulting a legal advisor ensures that this initial step is handled in strict adherence to Colombian law.
- Tax Compliance and Regulatory Updates with Expert Guidance: It is highly recommended to engage a tax advisor to ensure the proper update of the Single Tax Registry (RUT) with the National Directorate of Taxes and Customs (DIAN), as well as the Industry and Commerce Registry (RIT) in Bogotá, if applicable. An updated certificate of existence and legal representation is a vital document at this stage.
- Public Notification of Liquidation: To inform the public and creditors of the liquidation, a formal announcement must be published in a widely circulated medium. This allows creditors to assert their claims, and enables the company, with the support of a financial consultant, to manage its obligations in an orderly manner.
- Preparation of the Social Capital Inventory: Within one month of registering the liquidation resolution, a special financial statement known as the "Social Capital Inventory" must be prepared. This document, which adheres to Colombia's Financial Reporting and Accounting Standards (NCIF), must be signed by the liquidator and endorsed by the statutory auditor or accountant. Engaging an accounting advisor is advisable to ensure accuracy and compliance.
- Settlement of Liabilities: Under the guidance of a financial consultant, the liquidator proceeds to settle all outstanding liabilities in accordance with the legal hierarchy of obligations. Priority is given to labor-related payments and tax liabilities, with any remaining assets distributed to shareholders or partners.
- Final Liquidation Report: Upon settling all debts, the liquidator presents the "Final Liquidation Report," along with a comprehensive account of their management activities. This report must be approved by the shareholders at the final general meeting. The involvement of an expert consultant can help streamline this process, ensuring adherence to regulatory requirements.
- Registration of Final Minutes with the Chamber of Commerce: Once approved by shareholders, the final liquidation minutes and account must be registered with the Chamber of Commerce, formally requesting the cancellation of the company’s commercial registration.
- Final Tax Deregistration: The process concludes with the cancellation of the RUT with DIAN and, where applicable, the RIT in Bogotá. At this stage, it is prudent to involve a tax consultant to ensure all regulatory and fiscal obligations are met and that the process is formally completed.
The Role of a Consultant in the Liquidation
Process Liquidating a company in Colombia is not simply a matter of following legal formalities; it involves a comprehensive review of the company's financial and tax standing. Engaging a specialized consultant is often crucial to identifying unresolved issues, expediting the liquidation process, and ensuring full compliance with all tax and accounting obligations. The duration of the liquidation will depend on the complexity of the company's circumstances, but with expert advice, the process can be managed efficiently and effectively.