The Simplified Stock Corporation is a corporate model characterized by a structure subject to the free autonomy of the shareholder(s) to stipulate the rules that fit the desired type of business according to their preferences. However, the Simplified Stock Corporation is regulated by Law 1258 of 2008, which stipulates the legal provisions under which the rules for its incorporation and other special rules for the organization and operation of the company are established.
Now, the Simplified Stock Corporation, hereinafter S.A.S., is a corporate type that provides its shareholder(s) with various advantages for the formation of new corporations, both in their incorporation and generally in their operation. Therefore, it is pertinent to mention some benefits brought by Law 1258 of 2008 regarding the incorporation of the S.A.S.:
- The incorporation of the S.A.S. is one of the most relevant advantages, since Law 1258 of 2008 establishes that the company may be incorporated by one or more natural or legal persons, national or foreign, who engage in civil or commercial activities, that is, it is constituted as a legal entity distinct from its shareholder(s), meaning that the law does not require a minimum of two persons to form the company.
- Regarding its registration, the S.A.S. may be created by contract or unilateral act through a private document, which must be registered in the Commercial Registry of the Chamber of Commerce of the place where the company establishes its principal domicile, and only in the event that the contributed assets require a public deed, the incorporation of the company must be elevated through a public deed.
- Limitation of liability of partners or shareholders: they are only liable up to the limit of their contributions. In this sense, Article 42 of Law 1258 of 2008 established that shareholders are not liable for labor, tax, or any other obligations incurred by the company, unless the shareholders and managers have participated in or facilitated acts of fraud, in which case they shall be jointly and severally liable.
- Free autonomy of this corporate type allows partners to have the possibility to set the rules that will govern the operation of the company according to their preferences, that is, the partner(s) may draft bylaws that adapt to the type of business being conducted and according to the conditions or preferences.
- Regarding shares, these may be of different classes and series, such as preferred shares, with preferential dividend and without voting rights, shares with fixed annual dividend, and payment shares. However, these cannot be traded on stock exchanges nor registered with the National Registry of Securities and Issuers.
- The law allows that, at any time, the S.A.S. may transform into another corporate regime, before its dissolution, when so decided by the assembly or the partners' meeting by unanimous determination of the associates holding all subscribed shares.
- Another benefit brought by the law is that in the incorporation of the S.A.S., it is not necessary to pay any sum, meaning that the paid-in capital may be zero. Likewise, regarding the subscription and payment of capital, it may be done under conditions and proportions different from those of the Commercial Code for Corporations. However, the rule clarifies that the term shall not exceed two years.
- According to Article 28 of Law 1258 of 2008, it was stipulated that the S.A.S. does not require a statutory auditor unless the company exceeds a certain level of assets or gross income.
- Law 1258 of 2008 grants jurisdictional functions to the Superintendence of Companies to resolve issues that arise within the company.
- Another advantage of incorporating an S.A.S. is that it is not necessary to determine the corporate purpose, that is, the activity to which the company will be dedicated, unless the shareholders so wish.
In this order of ideas, the S.A.S. is a corporate model that provides its shareholder(s) with several benefits and complete autonomy for the organization and operation of the company, as it allows the shareholder(s) to determine how the organization will be constituted in order to obtain better results. Thus, the structure of the S.A.S. allows greater flexibility for the entrepreneur, which is why today this corporate model enables the promotion of any business activity, as it is seen as an innovative model for business development.