Weekly update on accounting and legal issues in Colombia
Weekly update on accounting and legal issues in Colombia

1.The Superintendency of Companies, through official letter 220-229540 of October 18th, 2022, expresses the importance of having the Substitute Statutory Auditor and one or more legal representatives appointed.

Article 215 of the Commercial Code established the need for companies that are required to have a statutory auditor to have a substitute due to the importance of the role played by this auditing body within the company.

Similarly, the importance of legal representation before associates, as well as third parties in general, is of such significance that the law has provided the necessary mechanisms to prevent a company from being left without a person to represent it at a given time, as when the case of the absolute lack of it occurs, because that is when the existence of the figure of Alternate is essential.

Therefore, if a company does not have an Alternate legal representative or statutory auditor, the competent corporate body must proceed to appoint and register the appointment of a new legal representative or statutory auditor as soon as possible, under penalty of possible sanctions in the opposite case.

See: https://jadelrio.com/storage/Boletines/Colombia/Flash%2016/1_OFICIO_220-229540_DE_2022.pdf  


2.The Superintendency of Companies updated the Practical Guide for applying the equity method and preparing consolidated and combined financial statements.

According to the Body, this guide is issued to contribute to constructive supervision, facilitating the practical understanding of the current financial information standards regarding some technical aspects. 

See: https://jadelrio.com/Boletines/Colombia/16/2_GuiaPracticaAplicacion-MP-EF-Consol-y-EF-Combin.pdf  


3.Through Concept 220-217383 of October 4th, 2022, the Superintendency of Companies makes important clarifications on the application of the indicators of impairment and risk of insolvency.

Article 4 of Law 2069 of 2020 establishes the cause for the dissolution of commercial companies and branches of foreign companies due to non-compliance with the assumption of going concern, which is verified at the end of the fiscal year. In compliance with the provisions of the third paragraph of article 4 of Law 2069 of 2020, as established by Decree 1378 of 2021, “social administrators must monitor the financial statements, financial information and projections of the commercial company, to verify the existence or possibility of asset deterioration and insolvency risks and, if these exist, they will immediately report the results and deliver the supports of such analyzes to the highest corporate body so that it can adopt the corresponding decisions.”

See: https://jadelrio.com/Boletines/Colombia/16/3_OFICIO_220-217383_DE_2022.pdf


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