Colombia

The Superintendency of Companies of the Republic of Colombia is a public institution founded in 1931 whose principal mission is the protection of public economic order by ensuring confidence in the legal system, the generation of reliable accounting and financial data and by the supervision and intervention of private companies in risk and/or in a situation of insolvency, corporate fraud or corporate internal conflict.

Additionally the Superintendency of Companies acts as insolvency court.

The Superintendency contributes to economic development through the correct interpretation and implementation of the legal system as well as the implementation of adequate judicial processes. It seeks to perform its functions effectively with the purpose of avoiding critical corporate crisis situations conducting administrative investigations and judicial restructuring and bankruptcy processes.

The Superintendent of Companies acts as a direct delegate of the President.

I. Judicial Functions

A. Insolvency Court:

The Superintendency of Companies has judicial functions derived from Article 116, paragraph 3 of the Constitution of the Republic of Colombia. Said functions allow the Superintendency to act as judge in the insolvency processes of companies, sole propietorships, branches of foreign companies, and individual merchants. The latter may choose between the Superintendency and an ordinary civil court to act as their insolvency judge. The insolvency processes of all other debtors, specifically excluded by the insolvency law are seen by civil courts.

Insolvency procedures have the following purpose:

• Credit protection
• Recovery of ammounts owed by the debtor
• The preservation of companies as economic production units and sources of employment

The above mentioned purposes are accomplished through:

• Reorganization procedures
• Out of court reorganization agreements validated by an insolvency judge
• Judicial liquidation

The objective of a reorganization procedure is the preservation of feasible companies through a creditors-debtor agreement, and to normalize their commercial and credit relationships. To achieve this the debtor must endure an administrative and operational reorganization as well as an assets and liability restructure.

The judicial liquidation process seeks to have a prompt and organized liquidation, seeking to leverage on the debtor's equity.

The insolvency judge is the Delegate for Insolvency Processes (as of 2011)

B. Companies Court:

The Superintendency of Companies has a prevalent jurisdiction in the resolution of corporate conflicts derived from shareholder agreements and abuse, actions related to the incorporation contract and actions related to the lifting of the corporate veil.

The judge is the Delegate for Mercantile Processes (as of 2011)

C. Alternative Dispute Resolution

The Superintendency has an Alternative Dispute Resolution Center for the conciliation and arbitration of conflicts between shareholders and shareholders and the company.

D. Insolvency administrators

The Superintendency manages the list of insolvency administrators, including receivers, liquidators and valuation experts and appoints and removes insolvency administrators.

II. Administrative Functions:

The Superintendent has the power to supervise and investigate any company or corporation for the purpose of obtaining all information pertaining to its legal, financial, economic and administrative status company with the exception of entities supervised by the Superintendency of Banking.

A. Inspection: The Superintendency of Companies can request, confirm and analyze the information it requires on the legal, accounting, economic and administrative status of any company. The Superintendency of Companies may undertake administrative investigations of these companies.

B. Supervision: The Superintendency of Companies ensures that companies carry out their intended purpose and operations based on Colombian corporate law and their own byelaws. Supervision by the Superintendency is permanent over the following companies:

• Companies determined by the President of the Republic by decree.
• Companies determined by the Superintendent after analyzing a company's situation through an administrative investigation.
• Companies whose supervision is determined by law.

C. Control: The Superintendency of Companies has the power to order any corrective measure necessary to resolve a critical situation of a legal, accounting, economic or administrative nature. This power is granted by Laws 222 of 1995 and 1429 of 2010, including the removal and appointment of administrators, accountants and employees. The Superintendency, under a declaration of control, can initiate insolvency proceedings even in absence of a default of financial obligations.

Administrative functions are coordinated by the Delegate for Inspection, Supervision and Control