Company Formation

In Colombia, steps have been taken to simplify the procedures in setting up a company, eliminating requirements that were previously carried out by an attorney, all these efforts looking to formalize the economy. It does not matter if you are an entrepreneur or a foreign investor, before hiring a lawyer and starting the process of setting up a business, it is very important to evaluate some aspects that will impact important aspects such as requirements, obligations, taxes, responsibilities, and conformation of the corporate type, so to be advised by a lawyer or an accountant with a wide knowledge of the local regulations in Colombia, is a must for the fulfillment in the correct formation way of how to set up a company correctly.

When you decide to set up a business in Colombia, one of the first actions is to start checking if your company´s name is available, it is essential to do it, including the trademark and legal business due that they can be different.

The classification of economic activity (ISIC code) tells the different goverment entities, suppliers, and clients the activity that the company will be performing in Colombia.

In case of incorporating a foreign branch company, documentation of the principal has to be apostilled and translated by an official translator into Spanish; such documents are the bylaws of the principal, the incorporation resolution issued by the competent board administrator, and the powers of attorney for the officials who have the authority to represent the company in Colombia.

During the Company formation bylaws are very important, these document that governs the relationship between the partners of the company, they start to determine the type of company, the responsibilities, powers of the legal representative among other aspects of vital importance for the company formation, a copy of the bylaws is required at the time of registration with the chamber of commerce, together with the RUES form and documentation of the legal representative and partners. The registration fee is paid for a percentage according to the assigned capital and can be done at the time of filing the documents to proceed to be reviewed by an attorney to finish these process.

Once the Obtaining the PRE-RUT in the chamber of commerce, the next step is to open a bank account which you can open in any bank, with the certification issued by the bank next you must go to the DIAN, it will proceed to register the RUT as final, which must be taken to the chamber of commerce so that the certificate of existence and legal representation does not appear as provisional.

A procedure that is sometimes forgotten, especially by entrepreneurs, is the registration of the books in the chamber of commerce (Book of Minutes, Book of Shareholders), this omission can lead to fines, but also loss of the benefits contemplated by law since they have the probative nature of the activities carried out by the company.

Finally, one of the requirements that allow the company to hire employees is to affiliate them to the Social Security system, including public health coverage, pension system, family compensation fund and a labor risks administrator.

Remember that if your company has physical premises, you must comply with some special procedures to be able to function by the requirements of the law, all to offer security to customers, employees, and the company. These are, Fire Department Permit, Secretary of Health, District or Municipal Planning, and Copyright if you use music in your location.