CML LAWS ABOGADOS ESPECIALIZADOS SAS is a legal firm that provides legal services for the liquidation of companies in crisis and which are entering the phase of dissolution and liquidation.

The natural cycle of companies contains the option to terminate their activities definitively, either voluntarily or by legal mandate. In any case, the most convenient practice for all those interested is that the liquidation process be carried out in an orderly manner and with adequate professional guidance. On many occasions, the absence of suitable support means that the liquidation of the assets that make up the assets of a company become a real trauma for its partners, so that the liquidation does not solve the problems, but rather on the contrary, it generates new and more difficult challenges to overcome.

Experience indicates that late settlements are rather onerous and the lack of strategic planning is traumatic for the interests of the partners. It is necessary to have a professional and experienced accompaniment to organize and carry out a liquidation process that reasonably achieves its purposes.

One of the most frequent reasons for liquidation is the impossibility of developing the social enterprise due to a financial deficit, sometimes due to the variation in market conditions and in others due to the termination of the company, the extinction of the assets object of exploitation or simply due to the will of the partners.

In these cases, the highest corporate body must declare the occurrence of the respective cause, by the majority established in the statutes or in the law, and register the minutes in the Mercantile Registry as established by Law 1429 of 2010 in its Article 24 , thus eliminating the obligation to comply with the formalities of the statutory reforms required by the Commercial Code.

Once the minutes are registered in the Chamber of Commerce of the registered office, the name of the company is added the expression “in liquidation” and the company retains its legal capacity, but only for those actions aimed at its immediate liquidation, for which it cannot perform new operations in development of its business object.

In accordance to article 189 of the Commercial Code, all decisions made by the partners’ meeting or shareholders’ meeting must be recorded in minutes signed by the president and secretary of the meeting or board, respectively. Once the dissolution is approved, this act must be registered with the Chamber of Commerce and the registration fees paid.

With the declaration of dissolution, the company must continue to identify itself at the end of its name with the expression “in liquidation”, and may only carry out activities aimed at completing the liquidation: that is, to pay off the pending obligations of the company and distribute the remainder assets among the partners, if any.

At the end of the process, the final record of the liquidation of a company must be sent for registration, in which the final liquidation account must be approved, and the way in which the remaining assets have been distributed, taking into account articles 247 and 248 of the trade Code. It is necessary to take into account that if the distribution of remnants is for real estate, the act must be raised to a public deed.

It is important to note that while liquidators are not appointed, those who appear registered as legal representatives in the Mercantile Registry will act as such. In this sense, those who act in such capacity must inform the corporate creditors of the state of liquidation in which the company is found, by means of a notice that will be published in a widely circulated newspaper at the registered office.

Likewise, within ten (10) days following the registration of the dissolution in the respective Chamber of Commerce, the liquidator must inform the National Tax and Customs Directorate about the beginning of the liquidation of the company.

Once the inventory has been prepared, if the company lacks external liabilities, the liquidator will convene a shareholders’ meeting, with the purpose of approving both the inventory and the final liquidation account.

If there are external liabilities, they must be paid respecting the priority of the credits. In the final account, provisions must be made for the payment of conditional or litigious obligations. Once the external liabilities have been paid, the distribution of remnants among the associates may be initiated and this is recorded in the minutes, which must be submitted for registration in the Mercantile Registry.

The liquidation process concludes when the liquidator requests the DIAN to cancel the respective RUT, attaching the registration cancellation certificate issued by the Chamber of Commerce