Whereby Amending Book Ii Of The Commercial Code, A New Regime Of Bankruptcy Proceedings Is Issued And Other Provisions

Original Language Title: Por la cual se modifica el Libro II del Código de Comercio, se expide un nuevo régimen de Procesos Concursales y se dictan otras disposiciones

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Law 222 of 1995 (December 20)
Official Gazette No. 42156 of December 20, 1995
Whereby amending Book II of the Commercial Code, a new regime of bankruptcy proceedings is issued and other provisions. Summary

Term Notes


ARTICLE 1o. COMMERCIAL COMPANY AND SCOPE OF THIS ACT. Article 100 of the Commercial Code shall read as follows: Article 100.
will as commercial, for all legal purposes, the companies are formed for the execution of acts or business enterprises. If the social enterprise includes commercial acts and acts which do not have that quality, society will be commercial. Societies that do not provide in its corporate purpose commercial acts are civilians.
However, whatever their purpose, commercial and civil societies are subject, for all purposes, the commercial law. Effective Jurisprudence

Article 2.
. CAPACITY OF PARTNERS. Article 103 of the Commercial Code shall read as follows: Article 103.
incapable may not be members of partnerships or limited partnerships managers.
In other cases, they may be members, provided they act through their representatives or with the authorization, as appropriate. For the contribution of interests in land, it shall be sufficient compliance with the requirements of Article 111. Effective Decisions


ARTICLE 3o. PATTERNS. There will split when:
1. A society without dissolving, transferred block one or more parts of its assets to one or more existing companies or intended for the creation of one or more companies.
2. A company is dissolved without liquidation, dividing its assets into two or more parts, which are transferred to existing companies or intended for the creation of new companies.
The company or companies to which transfers resulting from the split, beneficiary companies will be called.
The partners of the company being divided participate in the capital of the recipient companies in proportion to take it, unless unanimously actions, social quotas or shares of interest represented at the meeting or board of partners spun-off, a different participation is approved.
. Demerger. The demerger plan must be approved by the shareholders' meeting or general meeting of shareholders of the company being divided. When in the process of splitting existing beneficiary companies involved it will usually require the approval of the assembly or board of each. The respective decision shall be taken by the majority provided by law or the statutes for the statutory reforms.
The demerger plan shall contain at least the following specifications:
1. The reasons for the split and the conditions to be performed.
2. The name of the companies involved in the division.
3. In the case of creation of new companies, the statutes of it.
4. Discrimination and valuation of assets and liabilities comprise the assets of the recipient company or companies.
5. The breakdown among the partners of the spun-off company, of quotas, shares or interest that correspond to them in the recipient companies, explaining the evaluation methods used.
6. The option to be offered to bondholders.
7. financial statements of the companies involved in the spin-off process duly certified and accompanied by an opinion issued by the auditor and failing by an independent public accountant.
8. The date from which the operations of the companies will dissolve considered carried out for accounting purposes on behalf of the company or absorbing companies. That provision is only effective between the companies participating in the spin-off and between the respective partners.

The 5th ARTICLE. ADVERTISING. The legal representatives of the companies involved in the spin-off process published in a newspaper of national circulation and in a newspaper of general circulation in the registered office of each of the participating companies, a notice containing the requirements provided for in Article 174 of the Commercial Code.
In addition, the legal representative of each participating company split agreement communicate the social creditors, by telegram or by any other means that produces similar effects.

. CREDITOR RIGHTS. The creditors of the companies involved in the division, who are holders of debt acquired prior to the publication of the previous article refers, may, within thirty days of the date of the last notice, require satisfactory and sufficient guarantees for payment of their claims, provided that they do not have such guarantees. The request will be processed in the same manner and produce the same effects provided for the merger.
The provisions of this Article shall not apply when as a result of the split assets spun-off company and the beneficiary, as appropriate, representing at least twice the external liabilities.
PARAGRAFO. For purposes of the provisions of this Article the administrators of the spun-off company will be available to creditors the demerger plan, during the term can be exercised the right to object.

Article 7. RIGHTS OF BOND HOLDERS. The bondholders of the companies involved in the division have rights under the provisions issued in this regard by the General Board of the Securities. Also they have the right to information under this Chapter.
. IMPROVING THE SPIN. The spin-off agreement must be recorded in a public document, which also contains the statutes of the new companies or the reforms introduced to the statutes of existing companies. Said deed shall be granted only by the legal representatives of the latter. In it, they must be notarized the following documents:
1. Permission for the split in cases where according to the rules on restrictive business practices, necessary.
2. The record or records that establishes the agreement of excision.
3. The authorization for cleavage by the oversight body should also involving one or more companies subject to such surveillance.
4. The audited financial statements and certificates of each of the participating companies, which were the basis for the split.
Copy writing cleavage recorded in the corresponding Chamber of Commerce to the registered office of each of the participants in the spin-off companies.

Article 9. EFFECTS OF THE SPIN. Once registered in the Commercial Register writing the previous article refers to, operate, among the companies involved in the division and third parties block transfer of the assets and liabilities of the original company to the beneficiary company, without prejudice the provisions on accounting matters.
For modifications of ownership rights in land and other property subject to registration simply list them in the respective deed of division, indicating the folio number of real estate registration or registration data identifying the good or respective right. With the presentation of writing single cleavage should proceed to the corresponding record.
When dissolved the spun-off company, any of its assets is not allocated by the split agreement to any of the recipient companies shall be apportioned among them in proportion to the asset that was awarded to them.
From registration in the Commercial Register of writing division, the recipient company or companies assume the obligations imposed on them in the spin-off agreement and acquire the rights and privileges of patrimonial part that they had, transferred. Likewise, the spun-off company when dissolved, liquidated means.

ARTICLE 10. LIABILITY. When a recipient company fails to fulfill any of the obligations assumed by excision or make the spun-off in respect of obligations that arose prior to it, the other participating companies jointly liable for the fulfillment of the respective obligation. In this case, liability is limited to the net assets that have corresponded them in the spin-off agreement.
In case of dissolution of the spun-off society without prejudice in tax matters, if any of the liabilities of the same is not allocated specifically to any of the recipient companies they jointly and severally liable for the corresponding obligation.

ARTICLE 11. RULES APPLICABLE TO THE MERGER. In merger cases, it is, in addition to what is enshrined in the Commercial Code, the provisions of the second paragraph of article 5 apply. of this Act.

ARTICLE 12. EXERCISE OF THE RIGHT OF WITHDRAWAL. When the transformation, merger or demerger impose greater accountability partners or imply a deterioration of their economic rights, absent or dissenting members shall be entitled to withdraw from society.
In joint stock companies shall also exercise this right in cases of voluntary cancellation of registration in the National Registry of Securities or stock exchange.
PARAGRAFO. For purposes of the provisions of this Article it shall be presumed deterioration of the economic rights of the partners, among others, in the following cases:
1. When the extent of the decrease partner in the capital of the company.
2. When the equity value of the share, fee or interest portion decreases or the nominal value of the share or quota is reduced, provided that in this case a capital reduction occurs.
3. When limit or decrease the negotiability of the action.

ARTICLE 13. ADVERTISING. The demerger, merger or bases of the transformation must be available to partners in the offices where the administration of society in the principal place of work, at least 15 working days prior to the meeting to go to be considered the relevant proposal. In the call to the meeting, it shall be included in the agenda the point concerning the division, merger, transformation or cancellation of registration and expressly state the possibility for members to exercise the right of withdrawal.
The omission of any of the requirements of this Article, make ineffective decisions related to the aforementioned issues.

ARTICLE 14. EXERCISE OF THE RIGHT OF WITHDRAWAL AND EFFECTS. Absent or dissenting members may exercise the right of withdrawal within eight days of the date on which the respective decision was taken. The manifestation of withdrawal partner communicated in writing to the legal representative.
The withdrawal produces effects against society from the time the written communication partner and third parties is received from registration in the trade register and the register of shareholders. For the record sufficient appropriate communication partner or legal representative exercising the right of withdrawal.
Except arbitration agreement, in case of disagreement on the existence of grounds for removal, the corresponding procedure will advance to the state agency responsible for exercising inspection, supervision or control.
If the shareholders or board members, within the adoption of the decision sixty days, the revoked the right to withdraw expires partners who exercised, repurchased their rights as far back the heritage nature at the time the withdrawal was notified to the legal representative.
option. Within the notification of withdrawal five days, the company will offer the shares, quotas or parts of interest to the other partners so that they acquire them within fifteen days, in proportion to their stake in the share capital. When partners do not acquire all the shares, quotas or shares of interest, society, within five days, the repurchase whenever there are net profits or reserves set aside for the purpose. The purchase price shall be determined as provided in the following article.

Article 16. REFUND. In cases where the partners or the company does not acquire all the shares, quotas or shares of interest, withdrawal will entitle whoever exercises to demand repayment of quotas, shares or other interest. The value is calculated by mutual agreement between the parties. Failing agreement, the assessment will be done by experts appointed by the Chamber of Commerce of the registered office. Such assessment shall be binding. The statutes may set different methods to set the value of the refund.
Unless otherwise agreed, reimbursement shall be made within the agreement or expert opinion two months. However, if the company proves that the refund within this term affect economic stability, it may request the State entity engaged in the inspection, supervision or control, establish additional periods not exceeding one year. During the additional period interest at the current bank rate will cause.
following the adoption of the respective decision two months, the entity engaged in inspection, supervision or control, on its own motion or at the request of interested, determine the unfairness of a right of withdrawal, when setting the refund substantially affect the common pledge of creditors.
PARAGRAFO. Without prejudice to the provisions on liability of the general partners, who exercise the right of withdrawal under the terms provided in the law, they will respond in a manner subsidiary up to the amount of the reimbursed by social obligations to the registration of retirement in the Commercial Register. Such liability shall cease one year after removal from registration in the Commercial Register.
. Any stipulation will be ineffective divest partners the right of withdrawal or alter your exercise or you do nugatory. However, valid waiver of the right of withdrawal, after delivery of the same. The waiver operates independently for each causal retirement.
The provisions of this law on recess, will not apply to companies subject to the supervision and control of the Banking Superintendency.


ARTICLE 18. REPRESENTATION OF MEMBERS. Article 184 of the Commercial Code shall read as follows:
Article 184. Any member may be represented at meetings of the Board Members or Assembly by written power of attorney in the name of the attorney stated, the person who can replace it if it is the case, the date or time of the meeting or meetings for which is conferred and other requirements specified in the statutes.
The powers granted abroad only require the formalities provided herein.
Article 19.
meetings. Provided it can be proven, there will be meeting of the board of trustees, general meeting of shareholders or board of directors when by any means all partners or members can deliberate and decide for simultaneous or successive communication. In the latter case, the succession of communications should occur immediately according to the medium employed.
PARAGRAFO. Effective Notes

Legislation Previous

MECHANISM ARTICLE 20. OTHER DECISIONS. Shall be valid decisions highest corporate body or board when writing, all partners or members express the meaning of their vote. In this event the respective majority shall be calculated on the total shares of interest, quotas or shares or members of the board, as appropriate. If partners or members had expressed their vote in separate documents, they must be received within a maximum period of one month, counted from the first communication.
The legal representative shall inform the board members or members of the meaning of the decision, within the receipt of documents in which the vote is expressed five days.

ARTICLE 21. MINUTES. In the cases referred to in Articles 19 and 20 above, the minutes shall be designed and settle in the respective book within thirty days from the date on which concluded the agreement. The minutes shall be signed by the legal representative and company secretary. In the absence of the latter, they shall be signed by any of the partners or members.
PARAGRAFO. Be ineffective decisions taken under Article 19 of this Law, when one of the partners or members not involved in the simultaneous or successive communication. The same penalty shall apply to decisions adopted pursuant to Article 20 when one of them does not express the meaning of their vote or exceed the term of a month there indicated.

ADMINISTRATORS ARTICLE 22. Are administrators, the legal representative, the liquidator, the factor, members of boards or boards and who, according to the statutes exercise or possess, those functions.

ARTICLE 23. DUTIES OF DIRECTORS. Managers must act in good faith, with loyalty and diligence of a good businessman. Their performances will be met in the interests of society, taking into account the interests of its members.
In fulfilling its role managers should:
1. Make efforts leading to the proper development of the social object.
2. To ensure strict compliance with legal or statutory provisions.
3. Ensure that the proper performance of the functions entrusted to the tax inspection is permitted.

4. Save and protect commercial and industrial reserves of society.
5. Refrain from misusing inside information.
6. Give equal treatment to all members and respect the right of inspection of all of them.
7. Refrain from participating in person or by proxy personal or third party interest in activities that involve competition with the company or acts for which there is a conflict of interest, unless authorized by the shareholders' meeting or general meeting of shareholders.
In these cases, the administrator will supply the appropriate corporate body all the information that is relevant to making the decision. Of the respective determination should be excluded Administrator vote, if it be partner. In any case, the authorization of the shareholders' meeting or general meeting of shareholders may be granted only when the act does not prejudice the interests of society.

ARTICLE 24. LIABILITY OF ADMINISTRATORS. Article 200 of the Commercial Code shall read as follows: Article 200.
administrators jointly and unlimitedly liable for the damages for negligence and willful misconduct society, partners or third parties.
Not be subject to such liability, who have not been aware of the act or omission or voted against, as long as not running.
In cases of breach or abuse of their duties, violation of the law or regulations, guilt is presumed administrator. Effective Jurisprudence

Similarly presumed guilt when administrators have proposed or implemented the decision on distribution of profits in violation of the provisions of Article 151 of the Commercial Code and other relevant rules. In these cases the administrator liable for the sums left to divide or distributed in excess and damages that may be required. Effective Jurisprudence

If the administrator is a legal person, the respective responsibility is it and who act as your legal representative.
Is deemed not to the clauses of the social contract that tend to absolve managers responsibilities to these or limit them to the amount of bonds that have lent to exercise their duties.

ACTION ARTICLE 25. SOCIAL RESPONSIBILITY. The corporate liability action against the directors corresponds to the company, following a decision of the general assembly or the board of shareholders, which may be adopted although not listed in the agenda. In this case, the call may be made by a number of shareholders representing at least twenty percent of the shares, quotas or shares of interest in which the Director is divided capital.
The decision will be taken by half plus one of the shares, quotas or shares of interest represented at the meeting and will involve the removal of the administrator.
However, when the decision adopted by the assembly or board members, not social responsibility action is commenced within three months, it may be exercised by any administrator, auditor or by any of the partners in the interests of society. In this case the creditors representing at least fifty per cent of the external liabilities of the company may exercise social action and always when the company's assets is not sufficient to satisfy their claims.
The provisions of this Article shall be without prejudice to individual rights that apply to partners and third parties. CHAPTER V.

SUBORDINATION. Article 260 of the Commercial Code shall read as follows:
Article 260. A company will be a subsidiary or controlled when its power of decision be subject to the will of another or others who are their parent or controlling, either directly, if in which the former subsidiary will be called or with the aid or through subordinate matrix, in which case it will be called subsidiary.

Article 27. Subordination ASSUMPTIONS. Article 261 of the Commercial Code shall read as follows: Article 261.
be subordinate a company when you are in one or more of the following cases:
1. When more than fifty percent (50%) of the capital belongs to the parent company, directly or through or with the assistance of its subsidiaries, or subordinate of them. For this purpose, actions shall not be calculated with preferential dividend and no voting rights.

2. When the parent and the subsidiaries, either jointly or separately the right to cast a ballot for the minimum deciding majority on the board of partners or shareholders, or have the number of votes required to elect the majority of members of the board, if any.
3. When the matrix, directly or through or with the assistance of the subordinate, because of an act or business with the subsidiary or its partners, to exercise dominant influence in the decisions of the governing bodies of society.
PARAGRAFO 1o. There will also be subordination, for all legal purposes, when control under the circumstances provided in this Article, be exercised by one or more natural or juridical persons of a corporate nature, either directly or through or with the support of entities in which they own more than fifty percent (50%) of the capital or set the minimum majority for making decisions or exercise dominant influence in the management or decision making of the organization.
PARAGRAFO 2o. Likewise, a company is considered subordinate when control is exercised by another company, through or with the assistance of one or more of the entities mentioned in the preceding paragraph.
. There will be business group as well the relationship of subordination, exists between entities unity of purpose and direction.
It is understood that there is unity of purpose and direction when the existence and activities of all entities pursue the attainment of a determined by the parent or controlling under the direction exerts on the whole, without prejudice to individual development objective corporate purpose or activity of each of them.
It will be up to the Superintendency of Companies, or applicable to the Securities and Banking, determine the existence of the business group where there is disagreement about the assumptions that originate.

ARTICLE 29. SPECIAL REPORT. In cases of business group, both managers of the subsidiaries, as the parent, must submit a special report to the assembly or board members, in which the intensity of the economic relationships between the parent shall be expressed or its affiliates or subsidiaries with the respective subsidiary.
The report, to be presented at the dates indicated in the statutes or the law for ordinary meetings, must account at least the following aspects:
1. The most important operations completed during the respective exercise, directly or indirectly, between the parent or its affiliates or subsidiaries with the respective subsidiary.
2. The most important operations completed during the respective year between the subsidiary and other entities, under the influence or in the interest of the parent as well as major operations completed during the respective year between the parent company and other entities, interest controlled, and
three. The most important decisions that controlled company has taken or failed to take the influence or in the interest of the parent company, as well as decisions of greater importance than the parent company, has taken or failed to take in the interests of the subsidiary;
The Superintendency of Companies, or possibly the Securities and Banking, may at any time, request, verify the accuracy of the content of the special report and if it is the case, take the measures it deems appropriate.

ARTICLE 30. OBLIGATION OF REGISTRATION WITH THE TRADE REGISTER. When in accordance with the provisions in Articles 260 and 261 of the Commercial Code, a situation control is set, the parent company shall state in private document shall contain the name, address, nationality and activity linked and budget that results in the control situation. This must be presented for registration in the game for the constituency of each linked, within the configuration of the control situation thirty days commercial register.
If after the period in the preceding paragraph refers to, is not been paid the registration referred to in this article, the Superintendency of Companies, or possibly the Securities and Banking, on its own initiative or at the request of any interested party, declare the situation of linkage and order the registration in the Commercial Register, subject to the imposition of fines that may be required by this omission.

In cases where the assumptions are given for there business group this provision shall apply. However, the requirement of registration of the business group in the commercial register, registration of control situation between the companies that comprise it will not be necessary.
PARAGRAFO 1o. The Chambers of Commerce shall be required to be stated in the certificate of existence and legal representation as parent or subordinate that has society and its relationship to a business group, according to the criteria specified in this law.
PARAGRAFO 2o. Any change in the control situation or group, entered in the Commercial Register. When this requirement is omitted, the state entity engaged in inspection, supervision or control of any linked may in the terms stated in this article, order the corresponding registration.
CHECKING OPERATIONS 31. SUBORDINATED COMPANIES. Article 265 of the Commercial Code shall read as follows:
Article 265. The respective bodies of inspection, supervision or control, may prove the reality of the transactions entered into between a company and its related. If irealidad verify such operations or its holding in considerably different than the normal market, to the detriment of the State, partners or third parties, impose fines and if necessary, order the suspension of such operations. This is without prejudice to the actions of members and others that may be required to obtain appropriate compensation.

ARTICLE 32. PROHIBITION TO SUBORDINATED COMPANIES. Article 262 of the Commercial Code shall read as follows: Article 262.
subordinate companies may not have any title, shares of interest, quotas or shares in companies that conduct or control. Be ineffective business to be concluded, contrary to the provisions of this article.

PARAGRAPH Article 455 of the Commercial Code the following paragraph is added. In any case, when a control situation under the terms provided in the law is set up, you can only be paid the dividend in shares or released from the same company, the partners so agree. Effective Jurisprudence


ARTICLE 34. OBLIGATION OF FINANCIAL STATEMENTS preparation and dissemination. To each fiscal year and at least once a year, on December 31, companies must cut their accounts and prepare and disseminate general purpose financial statements, duly certified. Such statements shall be circulated along with the corresponding professional opinion, if it existed.
The Government may establish cases in which, in response to the volume of assets or income to be admissible the preparation and dissemination of financial statements of general purpose shortcuts.
Government entities engaged in inspection, supervision or control, may require the preparation and dissemination of financial statements for interim periods. These states will be suitable for all purposes, except for the distribution of profits.

ARTICLE 35. FINANCIAL STATEMENTS. The parent matrix, in addition to preparing and presenting financial statements of individual general purpose, should prepare and disseminate financial statements of consolidated general purpose, to present the financial position, results of operations, changes in equity and flows cash parent or controlling and subordinates or dominated, as if they were a single entity.
The financial statements of consolidated general purpose should be submitted for consideration of who is responsible for approval or disapproval.
Investments in subsidiaries should be accounted for in the books of the parent or controlling by the equity method.

ARTICLE 36. NOTES TO THE FINANCIAL STATEMENTS AND STANDARDS OF PREPARATION. The financial statements will be accompanied by their notes, which form an indivisible whole. The financial statements and notes will be prepared and presented in accordance with generally accepted accounting principles.

ARTICLE 37. FINANCIAL STATEMENTS CERTIFICATES. The legal representative and public accountant under whose responsibility had prepared the financial statements shall certify those available to partners or third parties. The certification is to declare that have previously verified the statements contained therein, in accordance with regulations, and that they have faithfully taken from the books.

audited financial statements. They are those certified audited financial statements accompanied by the professional opinion of the auditor or, failing that, the independent public accountant that any examined in accordance with auditing standards generally accepted.
These statements must be signed by that professional, putting the phrase "see the opinion attached" or similar. The meaning and scope of its signature shall be as stated in its opinion, containing at least the statements required by the regulation. Effective Jurisprudence

When financial statements are presented together with the management report of the directors, the auditor or independent public accountant shall include in its report its opinion on whether these exists between them and proper matching.

ARTICLE 39. AUTHENTICITY OF FINANCIAL STATEMENTS AND OPINIONS. Unless proved otherwise, the certificate and the opinions financial statements are presumed authentic.

Article 40. CORRECTION OF FINANCIAL STATEMENTS. Government entities exercising inspection, supervision or control, may order rectify the financial statements or notes that do not conform to legal standards.
Case of financial statements for each financial year, rectifications will affect the period under review, provided that it is notified within the month following the date on which they were presented in full to the respective authority. Rectifications past that period will be recognized in the current year.
Corrections will be announced by spreading the respective financial statements and, in any case, in the manner and time determined by the respective government entity.
The order of rectification will only have effect when the government entity that exercises inspection, supervision or control has expressly resolved resources that might arise if they were filed.

ARTICLE 41. ADVERTISING OF FINANCIAL STATEMENTS. Within the month following the date on which they are approved, a copy of the general purpose financial statements shall be deposited together with its notes and its opinion, if any, in the Chamber of Commerce of the registered office. This issue copy of these documents to request and pay the costs.
However, government entities engaged in the inspection, supervision or control may establish cases in which no deposit required or additional advertising medium is required. They can also order advertising of the interim financial statements.
The Chamber of Commerce shall retain, by any means, the documents mentioned in this article for a period of five years.
When financial statements are deposited in Ia Superintendency of Companies, they will not have to be deposited in the chambers of commerce. The Superintendency of Companies will ensure the necessary mechanisms to ensure access to the information not be confidential. The Chamber of Commerce shall retain, by any means, the documents mentioned in this article for a period of five years. Effective Notes

ARTICLE 42. ABSENCE OF FINANCIAL STATEMENTS. Without prejudice to the sanctions that may apply when a society without just cause refrain from preparing or disseminating financial statements being obliged to, third parties may adduce any other evidence accepted by law.
Managers and the auditor, liable for the damages caused to society, partners or others for the no preparation or dissemination of the financial statements.

Article 43. Criminal Liability. Without prejudice to other standards, they shall be punished with imprisonment of one to six years who knowingly:
1. Provide data to the authorities or proof or certification issued contrary to reality.
2. Order, they tolerate, or abet make falsehoods in the financial statements or notes. Editor's Notes

Effective Jurisprudence


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