Running a business is not a simple matter. Many businessmen prioritize and dedicate 100% of their resources and efforts to the commercial development of the business. This generally results in leaving for a second stage the fulfillment of legal obligations related to the management of a corporation (sociedad anónima).
However, from the outset, it is important to be in compliance with all the obligations that the legal entity has to avoid contingencies that – as we will see later – can result in a catastrophic repercussion for the business.
In this article, we will detail all the obligations that a corporation has from its constitution.
- Registration into the Directorate of Registration and Supervision of Societies of the Treasury Attorney’s office under the Ministry of Finance (Inscripción de la Sociedad en la Dirección de Registro y Fiscalización de Sociedades de la Abogacía del Tesoro, dependiente del Ministerio de Hacienda). This registration must be made within 45 business days from the registration of the company in the Public Registry of Legal Entities and the Public Registry of Commerce. From that moment on, any modification, transformation or dissolution that the company undergoes must also be registered with the Directorate of Registration and Supervision of Societies of the Treasury Attorney’s. Failure to comply with this obligation leads to the application of a fine of 100 minimum wages.
- Communication to the Administrative Registry of Persons and Legal Structures and the Administrative Registry of Final Beneficiaries, dependent on the Ministry of Finance (Comunicación de la Sociedad en el Registro Administrativo de Personas y Estructuras Jurídicas y en el Registro Administrativo de Beneficarios Finales). This communication must be made within 45 business days from the registration of the company in the Public Registry of Legal Entities and the Public Registry of Commerce. From that moment, any modification of the Final Beneficiaries must be communicated. Failure to comply with this obligation may cause the blocking of the RUC, suspension of banking operations, fines between 50 to 500 minimum wages and even fines equivalent to 30% of the profits or dividends of the company.
- Company books (Libros Societarios). Corporations are required to keep the following books updated: (1) Minutes of Assemblies; (2) Board Minutes; (3) Deposit of shares and attendance at assemblies; and, (4) Register of shareholders. All the mentioned books must be foliated and must have the rubric of the General Directorate of Public Registries.
- Ordinary General Assembly of Shareholders (Asamblea General Ordinaria de Accionistas). Corporations are required to hold an ordinary general assembly within the first 4 months after the end of the fiscal year. In this Assembly, it is necessary to treat these themes: (a) Annual Report of the Board of Directors, balance and profit and loss account, distribution of profits and report of the receiver; (b) Appointment of directors and trustees and setting of their remuneration (as long as the duration of the Board of Directors has expired); (c) Any other point provided by the bylaws. From the date of the Assembly, the corporation has a period of 15 business days to communicate to the Directorate of Registration and Supervision of Societies of the Treasury Attorney’s office the assembly held a situation that also applies in the event of extraordinary assemblies. In case of doing it out of time, the corporation will be sanctioned with the suspension of any procedure before the Treasury Attorney’s office.
In addition to the obligations mentioned, there are also internal obligations applicable to companies (sociedad anónima) that must also be fulfilled, whose non-compliance or partial compliance may lead to the annulment of the acts performed.
Among the obligations to which we refer we can cite the convoking that the Board must make each time they want to convoke an assembly, the filling of company books, the verification of the legal quorum to validly sit in board meetings or in assemblies, the verification of votes to approve a deliberation, the verification of the points to be discussed in each assembly, among others.
In the event that the corporation hires dependent employees:
- Registration as an employer in the Social Security Institute (IPS) (Inscripción como empleador en el Instituto de Previsión Social (IPS). This registration must be made at the time that the commercial activities begin. Once the company is registered as an employer, dependent employees must be registered within a period not exceeding 3 business days. The inscription is made before the Direction of Employer Labor Contribution of the Social Security Institute.
- Registration as an employer in the Ministry of Labor, Employment and Social Security (Inscripción como empleador en el Ministerio de Trabajo, Empleo y Seguridad Social (MTESS). This registration must be made within a maximum period of 60 days from the start of the employment relationship. Once the company is registered as an employer, dependent employees must be registered. Registration is done before the Employer Worker Registration Department of the Ministry of Labor, Employment and Social Security.
- Work books (Libros Laborales). Every employer registered is obliged to keep the following books updated: (1) Register of Employees and Workers; (2) Register of Salary and Wages; and (3) Annual Vacation Registration. All the mentioned books must be foliated and must have the rubric of the Employer Worker Registration Department of the Ministry of Labor, Employment and Social Security.
- Admissional and periodic medical examinations (Examenes medicos adminsionales y periodicos). Admission medical examinations must be carried out on all dependent employees at the place and time indicated by the employer. Once the worker carries out the medical examination, the doctor must issue a medical certificate for the examination performed. The employer is obliged to present the medical certificate by a form before the Directorate of Employer Contribution of the Social Security Institute. Periodic medical examinations should be performed every 12 months maximum.
- Internal workplace regulations. All employers with more than 10 employees in their charge must have an Internal Workplace Regulation approved before the Ministry of Labor, Employment and Social Security. The Internal Workplace Regulation must contain mandatory provisions, aimed at regulating order, discipline and security, necessary to ensure the productivity of the company and the proper execution of work in work establishments.
Related to accounting management:
- Accounting books initialed. The accounting books are: (1) Daily Book; (2) Inventory; and, (3) General Ledger. All the mentioned books must be foliated and must have the rubric of the General Directorate of Public Registries. In addition, the Purchase and Sale (VAT) books must be printed.
- Presentation of sworn statements on a monthly before the Ministry of Finance (Sub Secretary of Taxation)
- Presentation of sworn statements annually before the Ministry of Finance (Sub Secretary of Taxation)
At Altra Legal, we have extensive experience in company maintenance and preventive advice in corporate matters. For more information on these issues, contact Abg. Andrea Reiser (firstname.lastname@example.org).