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If you are going to do business in Colombia you will need a law firm that can help you negotiate and finalize complex legal agreements while always protecting your legal interests.

From Franchise Agreements and Supply Agreements to Distribution Agreements and Joint Ventures, our Commercial Law Practice Group provides comprehensive legal services to foreign clients in anticipation of any commercial transaction in Colombia:

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  • Agency and Distribution Agreements (“Contratos de Agencia Commercial/ Distribución”):

If your company is looking to market a product or offer a service in Colombia or abroad without the risk associated with financing a local subsidiary you should consider the advantages of working with a local agent or establishing a relationship with a distributor in the host nation. This is often the fastest and most cost-effective way to access local markets. Our service includes all aspects of the transaction including, but not limited to:

        • tax analysis;
        • fees and commissions;
        • non-compete provisions;
        • advertising issues;
        • resale price restrictions;
        • sub-agency and sub-distributorship relationships;
        • management of intellectual property;
        • goodwill indemnity provisions; and
        • dispute resolution mechanisms.
  • Franchise Agreements (“Contratos de Franquicia”):

If your company is interested in expanding in Colombia without the hassle and expense of establishing multiple subsidiaries in different foreign jurisdictions you should consider franchising your business. A franchise agreement allows you to increase your global footprint while giving your company greater control over how your products or services are marketed and sold in local markets. Our service includes all aspects of the transaction including, but not limited to:

        • tax analysis;
        • fees and commissions;
        • intellectual property transfer and licensing;
        • sublicensing and assignment;
        • best practices provisions;
        • financial reporting;
        • franchisee training;
        • confidentiality provisions; and
        • dispute resolution mechanisms.
  • Sales of Goods Agreements (“Contratos de Compraventa”):

Langon specializes in drafting and negotiating sales agreements under Colombian law as well as international sales agreements subject to the UN Convention on Contracts for the International Sales of Goods, the UNIDROIT Principles of International Commercial Contracts, and ICC Model International Sale Contract provisions. Our attorneys work with our clients to structure transactions quickly and efficiently. We handle all aspects of this type of transaction including:

        • tax analysis;
        • price and quantity terms;
        • intellectual property international licensing;
        • export/import controls;
        • required certificates;
        • payment procedures;
        • delivery requirements;
        • transfer of title;
        • insurance;
        • intellectual property issues; and
        • dispute resolution provisions.
  • Joint Venture Agreements (“Contratos de Joint Venture”):

If you plan to expand into the Colombian market along with one or more business partners you may want to consider structuring a local joint venture. This would allow partners to leverage complementary knowledge, expertise and resources while minimizing overall cost for all partners. A Joint Venture Agreement outlines all the relevant terms that apply to the local joint venture and would include:

        • JV structure analysis;
        • tax analysis;
        • implications of JV on existing operations;
        • JV governance issues;
        • management structuring;
        • interaction between co-venturers;
        • business plans and budgeting;
        • intellectual property international licensing matters;
        • financing matters;
        • exit and termination rights;
        • insurance clauses; and
        • dispute resolution provisions.

Corporate Structure

At a minimum, the S.A.S. form requires a shareholder and a legal representative. A board of directors is not required. An auditor may be required depending on the size of the company or the specific industry.

Legal Representative

Unlike other countries, the title of “legal representative” is crucial in a Colombian company. A legal representative will have complete access to the company’s books and bank accounts and will be able to bind the company when signing legal agreements. Keep in mind that the legal representative should be someone who is based in Colombia as legal representatives will need to sign documentation on a regular basis. This is why many foreign investors grant legal representation status to their local legal counsel or local manager.

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Corporate Flexibility

The S.A.S. form has a great deal of flexibility: (i) one person may own all the ownership interests in the S.A.S.; (ii) the same person can be sole shareholder, legal representative and manager; (iii) allows for the creation of a preferred stock structure; (iv) business may have a perpetual existence; (v) no obligation to maintain a reserve on its books (as is the case with other legal forms); (vi) no obligation to pay a minimum dividend (as is the case with other legal forms); (vii) no need to register a public deed in connection with its registration (as is the case with other legal forms); and (viii) allows for private mediation/arbitration for disputes between shareholders.

Registration Process

Registration via (i) written bylaws that are signed and notarized under Colombian law or (ii) written bylaws that are signed at the local chamber of commerce. Registration valid only after company is listed on the business registry (“Registro Mercantil”) of the local chamber of commerce.

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Company Name

You will have a great deal of flexibility when choosing the name of your company, though there are certain limitations. For example, the name of your company cannot be similar to the name of another company already registered. In addition, you cannot use certain names that are considered against “the public interest.” At the end of the name you need to include “sociedad por acciones simplificada” or the more traditional “S.A.S.”

Business Purpose

To register a S.A.S. you will need to specify at least one purpose for the company, though you can also add that it may conduct any business that is allowed under Colombian law.

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Limited Liability

The S.A.S. form grants shareholders broad limited liability. Note that the corporate veil may be pierced due to actual fraud and/or failure to maintain corporate formalities.

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Corporate Structure

At a minimum, the S.A.S. form requires a shareholder and a legal representative. A board of directors is not required. An auditor may be required depending on the size of the company or the specific industry.

Legal Representative

Unlike other countries, the title of “legal representative” is crucial in a Colombian company. A legal representative will have complete access to the company’s books and bank accounts and will be able to bind the company when signing legal agreements. Keep in mind that the legal representative should be someone who is based in Colombia as legal representatives will need to sign documentation on a regular basis. This is why many foreign investors grant legal representation status to their local legal counsel or local manager.

^
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^
^

Corporate Flexibility

The S.A.S. form has a great deal of flexibility: (i) one person may own all the ownership interests in the S.A.S.; (ii) the same person can be sole shareholder, legal representative and manager; (iii) allows for the creation of a preferred stock structure; (iv) business may have a perpetual existence; (v) no obligation to maintain a reserve on its books (as is the case with other legal forms); (vi) no obligation to pay a minimum dividend (as is the case with other legal forms); (vii) no need to register a public deed in connection with its registration (as is the case with other legal forms); and (viii) allows for private mediation/arbitration for disputes between shareholders.

Registration Process

Registration via (i) written bylaws that are signed and notarized under Colombian law or (ii) written bylaws that are signed at the local chamber of commerce. Registration valid only after company is listed on the business registry (“Registro Mercantil”) of the local chamber of commerce.

^
^
^
^

Company Name

You will have a great deal of flexibility when choosing the name of your company, though there are certain limitations. For example, the name of your company cannot be similar to the name of another company already registered. In addition, you cannot use certain names that are considered against “the public interest.” At the end of the name you need to include “sociedad por acciones simplificada” or the more traditional “S.A.S.”

Business Purpose

To register a S.A.S. you will need to specify at least one purpose for the company, though you can also add that it may conduct any business that is allowed under Colombian law.

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Learning Center

Limited Liability

The S.A.S. form grants shareholders broad limited liability. Note that the corporate veil may be pierced due to actual fraud and/or failure to maintain corporate formalities.

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