ministerio de comercio, industria y turismo república de colombia superintendency of companies

Ministerio de Comercio, Industria y Turismo República de Colombia

Superintendency of Companies

Ministerio de Comercio, Industria y Turismo

República de Colombia

SUPERINTENDENCY OF COMPANIES

POLITICAL CONSTITUTION OF COLOMBIAPOLITICAL CONSTITUTION OF COLOMBIAPublic Economic Order Public Economic Order

INSPECTION, OVERSIGHT AND CONTROL OF COMPANIES

(Article 189, Paragraph 24)

Measures to prevent business crisis Legal certainty and public confidence Reliability of accounting data




President of theRepublic

Ministry ofIndustry, Commerce and Tourism Superintendent of Companies

Head of Inspection, Oversight and Control

Head of Business Processes

Secretary General

Director of Information Services




Function of the Institution

• Administrative functions of inspection, oversight and control of legal entities that are companies cited in the law.

• Jurisdictional functions over companies, sole

proprietorships and branches of foreign companies in the real sector of the economy and an alternative mechanism for resolution of conflicts that directly affect such companies.

• Functions deriving from Law 550 of 1990, with respect to business recovery and restructuring.




Political Constitution1991

Law 222 of 1995

INSOLVENCY PROCEEDINGS

INSPECTION, OVERSIGHT

AND CONTROL

INSPECTION

CONTROL

OVERSIGHT

AGREEMENTSWITH CREDITORS

LIQUIDATIONS

Law 550 of 1999

AGREEMENT




Law 222 of 1995Law 222 of 1995Inspection, Oversight and Control - Art. 189 Pol. Const.Inspection, Oversight and Control - Art. 189 Pol. Const.

ARTICLE 83 INSPECTION

This is the power of the Superintendency of Companies to request, confirm and analyze from time to time 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.




ARTICLE 84 OVERSIGHT

Oversight consists of the Superintendency of Companies’ power to ensure that companies, with respect to their formation and operation and in carrying out their corporate purpose, conform to the law and to their bylaws. Oversight shall be performed on an ongoing basis.

Coverage: • Companies identified by the President of the Republic. • Companies identified by the Superintendent when analysis of data or an

administrative investigation reveals irregularities at the company.






ARTICLE 85 CONTROL

Control is the power of the Superintendency of Companies to order any corrective action necessary to resolve a critical situation of a legal, accounting, economic or administrative nature.




Law 222 of 1995Law 222 of 1995Title II –Title II – Insolvency Proceedings Insolvency Proceedings

Article 116 of the Political ConstitutionArticle 116 of the Political Constitution

ARTICLE 90 COMPETENCE

The Superintendency of Companies assumes the jurisdictional function exercising the power contemplated in Article 116, paragraph 3 of the Political Constitution. It shall have exclusive competence to arrange insolvency proceedings for all legal entities.

Civil judges specializing in insolvency proceedings or civil circuit judges shall handle insolvency proceedings for individuals.




Articles 334 and 335 of the Political Constitution

Establishes a system that promotes and facilitates business recovery and the restructuring of territorial institutions to safeguard the social function of companies and ensure the harmonious development of the regions.

Restructuring Agreement: agreement that, pursant to the provisions of Law 550 of 1999, is executed on behalf of one or several companies in order to correct deficiencies in their operating capacity and their capacity to honor their financial obligations so that these companies can recover by the deadline and under the terms stipulated in the Agreement.

Law 550 of 1999 Law 550 of 1999




Fundamental Purposes and Mission of the Superintendency of Companies

Contribute to the development of the community by providing certainty in interpretation and by streamlining the application of the legal system for businessmen subject to its oversight.

Develop expeditious alternative mechanisms for resolution of corporate conflicts.

Perform the jurisdictional functions for which it is responsible in a timely and highly specialized manner.

Confront the business crisis through effective prevention and attention to restructuring agreements and by monitoring insolvency proceedings.




SCOPE AND DISTRIBUTION Inspection, Oversight and Control

Inspection 7,261

Active Agree. Ag. w/ Cred. Forced Liq. Mandatory Liq. Voluntary Liq.

4765 386 180 1 637 129

2

Oversight 7,448

5915 228 85 3 202 101

5

Control 6034 16316




Business Crisis and Reliability of AccountingBusiness Crisis and Reliability of Accounting

1,500 companies had accounting

irregularities, 75% had not been warned

by the auditor

(Data in trillions of pesos – December 31, 2003)(Data in trillions of pesos – December 31, 2003)

1- Overcome the crisis – 66%NÚMERO DE SOCIEDADES 1,650TOTAL ACTIVOS 35.7TOTAL PASIVOS 17NÚMERO DE EMPLEADOS 176,700

3 – Law 550 – 1.6%NÚMERO DE SOCIEDADES 41TOTAL ACTIVOS 1.1TOTAL PASIVOS 1NÚMERO DE EMPLEADOS 2,337

2 – Yet to overcome crisis – 28%NÚMERO DE SOCIEDADES 705TOTAL ACTIVOS 22.4TOTAL PASIVOS 16NÚMERO DE EMPLEADOS 99,222

4 – Liquidation - 3.1%NÚMERO DE SOCIEDADES 77TOTAL ACTIVOS 0.3TOTAL PASIVOS 2.2NÚMERO DE EMPLEADOS 2,626

42%42% of 5,900 companies of 5,900 companies reviewed were reviewed were

experiencing critical or experiencing critical or significant deterioration significant deterioration

in 2003in 2003

NÚMERO DE SOCIEDADES 2,493TOTAL ACTIVOS 60.6TOTAL PASIVOS 36.7NÚMERO DE EMPLEADOS 282,118




Business Crisis and Reliability of AccountingBusiness Crisis and Reliability of Accounting



SITUACIÓN DE LAS SOCIEDADES MAS DE 2 A 1 1 A 1 0.5 A 1 MENOS DE

0.5 A 1EXCELENTEBUENAPROMEDIODETERIORO SIGNIFICATIVODETERIORO CRÍTICOACUERDO DE REESTRUCTURACIÓNLIQUIDACIÓN

(RELACIÓN ACTIVO Y PASIVO)MENOS DE

2 A 1 1.5 A 1


Business Crisis and Reliability of AccountingBusiness Crisis and Reliability of AccountingInsolvency Risk MatrixInsolvency Risk Matrix




Law 550 of 1999 and Liquidations

SOCIEDADES EN ACUERDO DE REESTRUCTURACIÓN

0

100

200

300

400

ACEPTADAS 318 283 191 124CELEBRADAS 66 250 190 158

2000 2001 2002 2003

EVOLUCIÓN DE LAS LIQUIDACIONES OBLIGATORIAS

0

200

ADMITIDAS 137 164 168 156 136 118

TERMINADAS 8 2 19 23 37 46

1998 1999 2000 2001 2002 2003




REFORM OF INSOLVENCY SYSTEMREFORM OF INSOLVENCY SYSTEMDraft of Finished Law Draft of Finished Law

Functions of Inspection, Oversight and Control Jurisdictional Functions

Prevention of crisis in the productive sector

ministerio de comercio, industria y turismo república de colombia superintendency of companies

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