Can a shareholder be excluded from a SAS if the bylaws do not provide for it?

In principle, not by that route. Article 39 of Ley 1258 de 2008 requires the ground to be agreed in the bylaws. Without such a clause, the prudent course is to assess other routes —negotiation, an amendment to the bylaws, breach-of-contract actions or measures before the Superintendencia de Sociedades— according to the conflict and the evidence available.

Updated June 16, 2026 · Fabio Castro Forero

Exclusion of a shareholder from a SAS: 6 key points before suing

Q: What majority is required to approve the exclusion?

Article 39 requires the shareholders' meeting to approve it by half plus one of the shares present. It is worth taking care how that vote is counted, especially the vote of the shareholder concerned, because an improper count is one of the most common cracks through which a challenge later enters.

Expelling a shareholder from an SAS: review the bylaws, the grounds, the evidence, the valuation, the buy-out and the risks before you vote or sue.

Category Corporate Law Updated June 16, 2026 Author Fabio Castro Forero

Corporate Law

Shareholder exit

Review the bylaws and the evidence before voting A poorly built exclusion can end in a challenge, damages or a loss of negotiating power.

Exclusion of a shareholder from a SAS: the question to answer before suing

Excluding a shareholder from a SAS (sociedad por acciones simplificada, Colombia's simplified stock corporation) can be a powerful tool, but a dangerous one if it is used badly. It is not enough that the shareholder turns out to be inconvenient, difficult or unwelcome: the first question is not whether it is advisable to exclude them, but whether the bylaws provide an applicable ground and a defensible procedure. The answer to that question decides whether a desired exit ends in a clean decision or in a longer and more expensive dispute.

This guide is written for shareholders, boards, legal representatives and investors in a SAS who are weighing a forced exit, a buyback or a shareholder dispute. The idea is to give you a route for deciding with documents, dates and evidence —and not in the heat of the moment—, so that the decision does not end in a challenge, a claim for damages or the decapitalization of the company.

In briefIn a SAS, excluding a shareholder is viable only if the bylaws provide for the ground: the Article 39 of the Law 1258 of 2008 requires that the exclusion be agreed in the bylaws, that the shareholders' meeting approve it by half plus one of the shares present, without counting the vote of the shareholder targeted by the measure, that due process be observed and that the capital contributions be reimbursed. Without a clause in the bylaws there is no exclusion. This mechanism should not be confused with the piercing of the corporate veil (art. 42) or with the abuse of the right to vote (art. 43): these are three different routes, with different requirements and different authorities.

The direct answer

Can a shareholder be excluded from a SAS in Colombia?

Excluding a shareholder from a SAS is viable only if the bylaws provide grounds for exclusion and the applicable procedure is followed, including reimbursement where appropriate. It is not enough that the shareholder is inconvenient, breaches obligations informally or that trust has been lost: the decision must have a basis in the bylaws, sufficient evidence and corporate due process.

In practice, exclusion has to be assessed with documents, dates and specific decisions, not with isolated accounts or stray remarks. Before calling a shareholders' meeting it is worth going through four filters in order, because skipping any of them is exactly what opens the door to a challenge.

1Bylaws. Does the document in force provide for exclusion as a ground, and with what procedure? If the clause does not exist, this is the point at which the case changes route.

2Ground. Does the specific conduct fit the ground agreed in the bylaws? A generic ground that does not withstand legal argument will not sustain the decision.

3Voting. Can the shareholders' meeting approve it with the majority required by the law and the bylaws, without improperly counting the vote of the shareholder concerned?

4Reimbursement. How is the stake of the departing shareholder valued and paid, and what effect does that have on the capital and on the creditors?

Bylaws before emotions

Exclusion is born of the document, not of anger

The most frequent mistake is to treat exclusion as an improvised punishment for a shareholder you dislike. The SAS works the other way around: the power to exclude is not presumed, it is agreed. If the clause was not written down while there was still good faith, creating it in the middle of the fight is far harder, because each shareholder will defend the reading that suits them best.

This guide does not replace advice on the specific documents in your case, but it does help you organize the conversation, avoid silent mistakes and arrive at a consultation better informed. The goal is not to win an emotional argument, but to take an early, documented decision that changes the course of the conflict before it becomes ungovernable.

Depending on where you stand

A lawyer's reading for shareholders, the legal representative and investors

The same conflict looks different depending on the position you hold in the company. It is worth reading the situation from your own role before making a move:

1Shareholders who want to exclude. The key question is not whether excluding is advisable, but whether there is a ground in the bylaws, a competent body, a valid majority and evidentiary support. Without those four elements, the decision is fragile.

2Shareholder at risk of exclusion. Check whether the ground really exists, whether it was validly approved, whether you had an opportunity to defend yourself and whether the reimbursement was calculated in accordance with the law and the bylaws.

3Legal representative. You must avoid carrying out an improvised exclusion. Your role requires you to look after the minutes, the commercial registry, the shareholders' ledger and the formal communications, because you are the one exposed if the procedure fails. It is worth being clear about the scope of the responsibilities of the legal representative of a SAS.

4Investor or buyer. Before coming into a SAS in conflict, review the exclusion clauses, the transfer restrictions, the shareholders' agreements and the valuation rules. What is not written down today will be tomorrow's lawsuit.

Before voting

A matrix for deciding whether exclusion applies

Not every conflict is resolved by excluding. This matrix cross-references the situation with the prudent route and the risk worth watching in each scenario, so that you do not force a route the case cannot bear:

Situation	Does exclusion apply?	Prudent route	Risk to watch
Bylaws with no ground	In principle, not by that route	Consider negotiation, a unanimous amendment or breach-of-contract actions	Excluding with no basis in the bylaws
A clear ground and solid evidence	It may be viable	Shareholders' meeting, due process and reimbursement	The vote of the shareholder concerned counted incorrectly
Change of control in a corporate shareholder	It may apply if provided for	Apply the bylaws and corporate rules	Failing to check the duty to inform
Harmful conduct with no clause	Not automatically	Liability, abuse, precautionary measures or a negotiated exit	Confusing a penalty with exclusion

The underlying idea

Excluding a shareholder is not an improvised penalty

Excluding a shareholder from a SAS requires reviewing, in this order, the bylaws, the ground, the procedure, the vote, corporate due process, valuation and reimbursement. Each of those steps is a point at which the decision can fall apart if it was handled carelessly. Using exclusion as emotional punishment does not speed up the departure of the inconvenient shareholder: it makes it more expensive, because it turns a corporate formality into a dispute on the legal, commercial and reputational fronts all at once.

The first review

The bylaws, before anything else

In a SAS the bylaws may provide grounds for exclusion, but that clause has to exist before the conflict. If it does not, adding or amending it is a particularly demanding amendment to the bylaws: touching a rule that goes to the root of a shareholder's continued membership usually requires the backing of all the subscribed shares, something that is almost impossible to obtain when the problem shareholder is precisely the one who would vote against.

That is why many companies discover too late that they cannot create a ground tailored to the inconvenient shareholder once the conflict has already broken out. An exclusion clause is like an exit clause: it only works if it was drafted calmly, not in the middle of the fight. That is why it is worth reviewing in cold blood which clauses in the bylaws of a SAS prevent disputes.

What makes a ground strong

Grounds: serious conduct, strong evidence and proportionality

Having an exclusion clause is not enough; the ground invoked must be serious, proven and proportionate to the penalty. A useful ground connects with verifiable breaches, not with perceptions. These are the situations that, well documented, usually sustain a decision:

Failure to pay in the capital contributions the shareholder committed to.
Breach of the restrictions on the transfer of shares agreed in the bylaws.
Competing with the business or diverting its activity into a business of one's own.
Improper use of the company's commercial or strategic information.
A conflict of interest not disclosed when contracting with the company.
Breach of shareholders' agreements or of acts that directly affect the company.

The evidence must show three things at once: the conduct, its impact and its connection with the ground. Mere friction among shareholders, without that thread, will not withstand legal argument.

When there is no clause

If there is no ground in the bylaws, exclusion must not be improvised

In a SAS, exclusion always starts from the bylaws. The Article 39 of Ley 1258 de 2008 allows grounds for exclusion to be provided for, requires the shareholders' meeting to approve it by half plus one of the shares present and requires the corresponding reimbursement to be dealt with. Creating or amending a clause as sensitive as this one, by contrast, is an amendment that normally requires the backing of all the subscribed shares. That is why, before calling the meeting, you have to confirm whether the ground already exists, whether it covers the specific conduct and whether the procedure respects defense, evidence, majority and valuation.

The absence of a ground does not mean standing still. Depending on the conflict and the evidence available, other routes can be considered: negotiating a purchase of shares, retirement agreements, an amendment to the bylaws by unanimity, breach-of-contract actions, liability of officers, a challenge to resolutions or measures before the Superintendencia de Sociedades (the corporate supervisor, which in Colombia also sits as a court). The key is to choose the route the case can actually support.

Exclusion, piercing of the veil and abuse of the vote: three routes that must not be confused

The exclusion of the Article 39 is an internal decision of the company to remove a shareholder where the bylaws provide for it. It is different from the piercing of the corporate veil of the Article 42 —the piercing of the corporate veil, which, in the face of fraud or harm to third parties, makes the shareholders and officers who carried out, took part in or facilitated the fraudulent acts jointly and severally liable, and which is declared by the Superintendencia de Sociedades— and also from the abuse of the right to vote of the article 43 —of majority, of minority or of parity—, which can lead to the resolution being declared null and to damages for the harm caused, likewise before the Superintendencia. In practice: if what you have is a shareholder committing fraud or a majority voting in order to buy cheap, the route may not be exclusion, but article 42 or article 43.

Read Ley 1258 de 2008 (arts. 39, 42 and 43) →

Distinguishing those three routes matters because it marks the border between a legitimate exclusion and an abuse of the majority. An exclusion is legitimate when it rests on a ground agreed in the bylaws, on serious evidence and on real due process; it stops being legitimate when the removal of the shareholder is used as a pretext to expropriate their stake or to keep them from the economic benefits that belong to them. That difference —easy to state, hard to sustain in the middle of a conflict— is what the authority examines when someone challenges the decision.

What the Superintendencia has said about protecting the minority shareholder

In Sentencia n.° 800-52 of June 9, 2016, the Delegatura de Procedimientos Mercantiles (the Commercial Proceedings Division) of the Superintendencia de Sociedades —in a dispute among the shareholders of a family company— recalled that those who manage and those who control the company owe duties to the other shareholders (in line with article 23 of Ley 222 de 1995) and that corporate law protects the minority shareholder against oppression or the expropriation of their economic rights. Applied to exclusion, this sets a clear limit: the majority may not use a resolution of the shareholders' meeting to keep the minority from what belongs to them. Where the removal lacks a ground in the bylaws, evidence or due process, it stops being an exclusion and comes close to abusive conduct, with the consequences of article 43.

This judgment was handed down by the Superintendencia in the exercise of judicial functions: it binds the parties to that proceeding and is cited here as persuasive guidance.

Read Sentencia 800-52 de 2016 (Superintendencia de Sociedades) →

The procedure

Shareholders' meeting, vote and corporate due process

Even where the ground exists, the form matters as much as the substance. The exclusion must be conducted formally: proper notice of meeting, a clear agenda, access to information, a real opportunity for the shareholder to give their side, robust minutes and voting in accordance with the bylaws and the law. The Article 39 requires approval by the shareholders' meeting with half plus one of the shares present; taking care how that vote is counted —especially the vote of the shareholder concerned— is decisive if the decision is not to be open to challenge.

The minutes must not merely declare the exclusion: they must give reasons for it. They have to record the ground, the facts that make it out, the evidence reviewed and the fact that an opportunity to defend was given. Poor minutes, drafted in haste, are one of the cracks through which nullity later enters.

Where it is won or lost

Valuation and reimbursement: the other half of the conflict

The conflict does not end when the shareholders' meeting decides to exclude. That is where the second half begins: the valuation of the stake, the reimbursement of the capital contributions ordered by the Article 39 and, where appropriate, the reduction of capital. This stage requires financial statements, a review of liabilities, cash, contingencies and a defensible valuation method that can hold up if the departing shareholder disputes it.

This is where many well-founded exclusions become expensive: a valuation made with incomplete figures, or a reimbursement that decapitalizes the company and affects its creditors, can turn a clean exit into a new lawsuit. It is worth treating the reimbursement with the same care with which the decision to exclude was handled.

What can go wrong

Risks if the exclusion is badly built

A weak exclusion rarely stays quiet. It usually comes back as a challenge, nullity of the resolution, a claim for damages, reputational blockage or a negotiation far more expensive than the one you were trying to avoid. And the damage is not limited to the relationship among shareholders: it can also hit banks, clients, personal guarantees and the day-to-day running of the business, just when stability is most needed.

Before making a move

A practical route before voting

Before calling the shareholders' meeting, it is worth preparing the ground: building the matrix of ground and evidence, estimating the economic impact, having a negotiated alternative ready and projecting the cash plan for the reimbursement. If there is room, it is worth exploring an agreed exit before forcing the exclusion, because it is almost always faster and cheaper. To prepare it, it helps to understand how to negotiate and prove a corporate dispute between shareholders. A negotiated exit usually rests on these pieces:

An independent valuation that both sides accept as a starting point.
Confidentiality about the terms and the reasons for the exit.
A non-compete covenant that is reasonable in time and scope.
An orderly handover of the company's information, passwords and assets.
Release of the departing shareholder's personal guarantees, co-debts and sureties.

The first five steps

What to do before voting or suing

When the conflict heats up, the temptation is to act fast. What we see in practice is that the first moves decide the outcome. Before voting an exclusion or filing a lawsuit, it is worth putting your own house in order:

1Pause new sensitive decisions. Avoid signing, paying or binding the company until there is a clear strategy.

2Preserve documents and conversations. Keep the bylaws, the minutes, the emails and the chats complete; delete nothing, however uncomfortable it may look.

3Separate facts, risks and people. Distinguish what happened from what you fear and from whom you dislike; that mixture clouds the decision.

4Decide who may respond. Appoint a spokesperson and a channel so as not to contradict yourself before shareholders, banks or authorities.

5Prepare the legal and the commercial exit. Have the exclusion route ready and, in parallel, the negotiation route, in case one unlocks what the other does not.

Red flags

Signs that the exclusion may be open to challenge

There are patterns that repeat in the exclusions that later fall apart. Several of them share one root: using the removal of the shareholder for something other than what the ground allows. If you recognize any of these in your case, it is worth stopping and reviewing before calling the meeting, because this is exactly where an exclusion stops looking legitimate and starts to look like an abuse of the majority:

The company wants to exclude, but the bylaws never included a ground.
The ground is broad, of the "bad behavior" kind, and does not withstand serious legal argument.
The shareholder competes with the company using internal commercial information.
The shareholder does not pay in the capital contributions and, even so, blocks cash decisions.
The majority uses the exclusion to buy a valuable stake cheaply.
A minority shareholder threatens clients in order to force a buyback.
The shareholders' meeting is called in haste and the minutes are poor, leaving the door open to a challenge.
The valuation is made with incomplete figures or out-of-date financial statements.
The reimbursement decapitalizes the company and affects the creditors.
The exit negotiation forgets personal guarantees, co-debtors or promissory notes.

Risk and decision

Decision table in the exclusion of a shareholder

Before escalating, it is worth reviewing point by point where the real risk lies and what the prudent decision is on each front:

Situation	Real risk	Prudent decision
Is there a ground in the bylaws?	If there is none, the exclusion is risky	Consider an amendment to the bylaws, a negotiated exit or an alternative route
Is the evidence documentary?	Stray witness statements may not be enough	Organize the document file before calling the meeting
Is there harm to the company?	It may look like a personal conflict	Quantify the economic and operational impact
Is the valuation defensible?	The exit becomes more expensive or falls apart	Obtain an independent financial opinion
Is there a reduction of capital?	Risk to creditors and to liquidity	Review the applicable rules and the cash plan
Is there an arbitration clause?	A mistake as to forum or as to timing	Choose the route before escalating

How and through which channel to communicate

A protocol for the notice of meeting, the minutes and formal communications

A large part of the damage in an exclusion is not born at the shareholders' meeting, but in messages sent in haste: defensive emails, long voice notes, replies to banks with nothing to back them up, or family chats that end up as evidence. Before communicating, it is worth deciding on the channel, the spokesperson, the documents that may be shared and the purpose of each reply:

Channel	Risk if it is used badly	Practical rule
WhatsApp or internal chats	Impulsive remarks, partial screenshots and loss of context	Write briefly, keep the full thread and avoid threats
Corporate email	Unintended admissions or incomplete attachments	Answer with verified facts and reviewed attachments
A meeting with shareholders or family	Conflicting accounts and promises that are hard to prove	Prepare an agenda, a note of the meeting and commitments in writing
An answer to a bank or an authority	Contradictions or handing over too much information	Prepare a document file and a legal position
A communication to employees or clients	Reputational noise and information leaks	Appoint a spokesperson and limit the message to operational continuity

The preliminary review

Questions that decide whether the exclusion is viable

If you come to the meeting with your lawyer already holding these answers, the analysis usually moves faster and with less noise. It is not about having everything resolved, but about separating verifiable facts from hypotheses and from pending decisions:

What specific decision do I have to make this week about the exclusion?
Which original document proves the most important account?
Who held the formal authority and who held actual control?
Which payments, signatures, messages or minutes could be seen out of context?
Who could destroy or alter evidence if action is not taken in time?
Which part of the problem is legal, commercial, family-related, reputational or accounting?
What practical outcome would be acceptable: to negotiate, to defend, to file a complaint, to correct or to exit?
What must I stop doing as of today so as not to worsen my position?

Gauge the temperature

Risk traffic light in the exclusion of a shareholder

Not every conflict calls for the same reaction. This traffic light helps you gauge the response according to how far the problem has advanced:

Level	How it looks	Suggested response
Low	There is unease, but the documents are complete and no one is pressing from outside	Put the file in order and request a preventive review
Medium	There are payments, signatures, messages or documents that are incomplete	Pause sensitive moves and prepare the timeline
High	A bank, a shareholder, an authority, an auditor or an opposing party is asking for an answer	Respond only with a strategy and reviewed supporting records
Critical	There is a criminal complaint, a precautionary measure, an account freeze, a public threat or a loss of control	Activate the defense, preserve the evidence and decide who speaks for the company

Build the document file

Documents and evidence worth having ready

An exclusion stands on papers, not on impressions. Before calling the meeting, it is worth gathering and reviewing this document file:

The bylaws in force, with their grounds and procedures.
Earlier minutes recording warnings or breaches.
Evidence of unpaid capital contributions or of unfulfilled commitments.
Emails, contracts and chats concerning the conduct complained of.
Evidence of competing activity, diversion of clients or improper use of information.
Up-to-date financial statements and accounting records.
A certification of liabilities, contingencies and available cash.
A valuation proposal or an independent report.
The notice of meeting, the agenda, the proxies and the attendance records.
A draft of the minutes giving clear reasons, with its annexes.

What makes the case more expensive

Mistakes that can void the exclusion or make it more expensive

Some mistakes are not noticed on the first day, but they come back once money or disagreements are involved. These are the ones that cost the most and the decision worth taking instead:

Mistake	Why it makes the case worse	Better decision
Answering from memory	It creates contradictions and leaves loose ends	Prepare a timeline and a document file
Deleting chats or files	It can look like concealment and it destroys context	Keep the originals and complete copies
Making accusations without proof	It closes off negotiations and weakens your credibility	Put the facts in order before giving them a legal label
Signing to buy time	It shifts liability onto whoever signs	Record your reservations and require competent supporting advice
Mixing family, business and reputation	It raises the temperature and makes agreement harder	Separate the conversations and the decision-making channels

When to consult

When it is worth talking to a lawyer before the next move

If the exclusion already touches documents, banks, shareholders, authorities, heirs, spouses, clients or reputation, an early conversation can save months of conflict. A consultation yields more when it arrives with verifiable facts and not with loose accounts: with the bylaws in front of you, the timeline built and the pending decision clearly defined, the lawyer can go straight to strategy instead of spending the meeting reconstructing what happened.

Useful reading on the SAS, shareholders and corporate governance

If you would like to understand the framework better before deciding on an exclusion, these readings and services can help you:

Corporate Lawyer, to review bylaws, grounds for exclusion and corporate governance rules tailored to the conflict.
Corporate law: an essential guide for companies and entrepreneurs, to place the exclusion within the full picture.
Commercial law and business entities in Colombia, to place the SAS within the general framework.

So you can check it yourself

Sources and legislation cited

Law 1258 of 2008 — sociedad por acciones simplificada (official text, Función Pública): article 39 (exclusion of shareholders), article 42 (disregard of the legal personality) and article 43 (abuse of the right to vote).
Corte Constitucional, Sentencia C-090 de 2014 — limited liability of the shareholder, with the piercing of the corporate veil as a counterweight (arts. 42 and 43).
Superintendencia de Sociedades, Sentencia n.° 800-52 de 2016 — duties of company officers (art. 23 of Ley 222 de 1995) and protection of the minority shareholder against the oppression or expropriation of their economic rights (persuasive guidance; res judicata only between the parties to that case).
Superintendencia de Sociedades — Cien preguntas y respuestas sobre la SAS (one hundred questions and answers on the SAS).

Content prepared by Cafore Abogados for general guidance in Colombia. It does not replace advice on the documents, the evidence and the specific dates of the case; the strategy depends on the bylaws, the shareholders, the city of registration and the decisions that are pending. Last editorial review: May 2026.

Before voting an exclusion

Checklist: tick off what you have already resolved

Use this list as a quick check before calling the shareholders' meeting or suing. Tick off each point as you resolve it with your lawyer; whatever is left unticked is exactly what needs to be settled before making a move:

A ground in the bylaws: do the bylaws provide for exclusion, and does the specific conduct fit that ground?
Documentary evidence: does the file show the conduct, its impact and its connection with the ground, beyond stray witness statements?
A valid majority: can the shareholders' meeting approve it by half plus one of the shares present, counting the vote of the shareholder concerned correctly?
Due process: is there a proper notice of meeting, an opportunity to defend, and minutes that give reasons rather than merely declaring?
Reimbursement and cash: is the valuation defensible, and does the reimbursement avoid decapitalizing the company or affecting the creditors?
An alternative route: have you assessed a negotiated exit in case the exclusion turns out to be more expensive or more fragile than an agreement?

Do you have a ground and the evidence to exclude?

Let us review your bylaws and your evidence before you vote

Cafore can review whether the bylaws of your SAS provide for exclusion, whether the ground and the evidence sustain the decision, and how to handle the shareholders' meeting, the reimbursement and the risk of a challenge. For an initial review, have at hand your role in the case, the document you received, the deadline, the amount at stake and the decision that is pending.

We answer your questions

Frequently asked questions about corporate law

What is a SAS and why is it the most widely used corporate form in Colombia?

The Sociedad por Acciones Simplificada (SAS) is a corporate form created by Ley 1258 de 2008 that is incorporated by private document, admits a single shareholder and offers broad flexibility in its bylaws. Its popularity is due to the fact that shareholders are liable only up to the amount of their contributions and that the bylaws can be widely adapted to the needs of each business project.

How is a SAS incorporated in Colombia, step by step?

A SAS is incorporated by private document with notarized signatures, or by public deed (escritura pública) where assets subject to registration are contributed, under article 5 of Ley 1258 de 2008. That document must be filed with the Registro Mercantil (commercial registry) of the Cámara de Comercio (chamber of commerce) for the company's main domicile, at which point the company acquires legal personality.

Are the shareholders of a SAS liable with their personal assets for the company's debts?

Under article 1 of Ley 1258 de 2008, shareholders are liable up to the amount of their respective contributions, so their personal assets remain separate from those of the company. That protection may be set aside, however, where it is proven that the company was used to defraud the law or to harm third parties, a doctrine known as levantamiento del velo corporativo (piercing the corporate veil).

Which clauses are mandatory in the bylaws of a SAS?

Article 5 of Ley 1258 de 2008 requires the bylaws to state the corporate name, the domicile and the authorized, subscribed and paid-in capital (the term of duration and the corporate purpose may be omitted: they are understood to be indefinite and any lawful activity), the form of management and grounds for dissolution if any are to be agreed. The absence of any of these elements can create problems of registration, or of the validity of later corporate action.

What majority is required to approve the exclusion?

Unless the bylaws provide a different procedure, article 39 requires the shareholders' meeting to approve it by half plus one of the shares present, without counting the vote of the shareholder targeted by the measure. It is worth taking care how that vote is counted, especially the vote of the shareholder concerned, because an improper count is one of the most common cracks through which a challenge later enters.

How does exclusion differ from the piercing of the corporate veil?

They are different mechanisms. Exclusion (article 39) is an internal decision to remove a shareholder where the bylaws allow it. The piercing of the veil, or disregard of the legal personality (article 42), operates in the face of fraud or harm to third parties, makes the shareholders and officers who carried out, took part in or facilitated the fraudulent acts jointly and severally liable, and is declared by the Superintendencia de Sociedades. They do not replace one another.

What if the problem is a majority voting in order to harm a minority?

That situation fits better under the abuse of the right to vote in article 43, which covers abuse of majority, of minority and of parity, and which can lead to the resolution being declared null and to damages for the harm caused before the Superintendencia de Sociedades. Not every power struggle is resolved by excluding: sometimes this is the right tool.

When does an exclusion stop being legitimate and become an abuse against the minority shareholder?

When it is used to keep the shareholder from their economic rights instead of applying a real ground. The Superintendencia de Sociedades, in Sentencia 800-52 de 2016, recalled that the legal system protects the minority shareholder against oppression or the expropriation of their rights. Where the removal has no ground in the bylaws, no evidence and no due process, it stops being an exclusion and comes close to abusive conduct, with the consequences of article 43. It is worth remembering that this judgment was handed down in the exercise of judicial functions: it binds the parties to that proceeding and in other cases is cited as persuasive guidance.

What happens with the reimbursement of the excluded shareholder's capital contributions?

Article 39 requires the corresponding reimbursement to be dealt with. That means valuing the stake with a defensible method and reviewing the effect on the capital and on the creditors. A valuation made with incomplete figures, or a reimbursement that decapitalizes the company, can open a new lawsuit, so it is worth treating this stage with the same care as the decision to exclude.

Is it better to negotiate the exit instead of excluding?

Frequently, yes. An agreed exit with an independent valuation, confidentiality, a non-compete, a handover of information and the release of guarantees is usually faster and cheaper than an exclusion that is challenged. The decision depends on the strength of the ground, on the evidence and on the real room for agreement among the shareholders.

Is a company's legal representative personally liable for the company's debts?

The legal representative is not in principle liable with their personal assets for the company's obligations, but they can be declared liable where they act with willful misconduct or negligence in the exercise of their functions, under article 200 of the Código de Comercio. That same rule presumes the fault of the officer where they breach or exceed their functions or infringe the law or the bylaws —a statutory presumption that the Corte Constitucional declared constitutional in Sentencia C-123 de 2006 and that the officer can rebut by proving their diligence—. That liability can be enforced through a corporate liability action before the Superintendencia de Sociedades or before the competent court.

What duties do the directors and officers of a Colombian company have?

Directors and officers must act in good faith, with loyalty and with the diligence of a good businessman, under article 23 of Ley 222 de 1995. Their specific duties include acting in the interest of the company, refraining from taking for themselves business opportunities that belong to the company, and disclosing the conflicts of interest that may affect their decisions.

What is piercing of the corporate veil and in which cases does it apply?

Piercing the corporate veil is the power of a judge, or of the Superintendencia de Sociedades, to disregard the separation between the company's assets and those of its partners or controlling parties where it is proven that the legal personality was used to defraud the law, to evade obligations or to harm third parties. It is available only exceptionally and requires solid evidence of abuse of the corporate form.

What is a shareholders' agreement and what is it for in corporate governance?

A shareholders' agreement is a private contract between partners that governs matters such as voting, the transfer of shares, the appointment of directors and officers and the exit rules, complementing the corporate bylaws. It makes it possible to define the internal governance of the company precisely and to prevent future disputes; Ley 1258 de 2008 expressly recognizes its validity in a SAS.

How can a company increase its capital in order to attract investment?

A SAS may increase its authorized capital by amending the bylaws and issue new shares in order to take in investment from third parties, a process that must respect the preemptive rights of the current shareholders where the bylaws so provide. It may also issue multiple-vote shares, privileged shares or other types contemplated in Ley 1258 de 2008 in order to structure investment rounds.

What does a merger or spin-off of companies in Colombia involve?

A merger means that two or more companies are combined into one, transferring assets, liabilities and contracts; a spin-off divides a company in order to create new ones or to transfer part of its assets to other existing companies, under articles 3 and following of Ley 222 de 1995; the merger is governed by articles 172 and following of the Código de Comercio. Both mechanisms require approval by the company's governing bodies, registration with the Registro Mercantil and, in certain cases, notice to the Superintendencia de Industria y Comercio because of possible implications for free competition.

When does a business group arise and what obligations does it create?

A business group exists where one company exercises control over one or more others and there is unity of purpose and direction among them, under article 28 of Ley 222 de 1995. Its existence triggers obligations to register with the Registro Mercantil, to consolidate financial statements, and a special regime of liability of the controlling company toward the subordinated ones.

How is a company wound up in Colombia and what steps does it involve?

The dissolution and winding-up of a company involves the adoption of the dissolution resolution by the competent body, the appointment of a liquidator, payment of external liabilities in priority to the partners' contributions and cancellation of the commercial registration, under articles 225 and following of the Código de Comercio. Poor handling of the process may give rise to personal liability of the liquidator toward creditors.

To go deeper

Related guides

Resources that expand on the key aspects of corporate law in Colombia.

Documento de estatutos de una SAS abierto en una cláusula, con una pluma encima

SAS bylaws

Bylaws of a SAS: clauses that prevent disputes How to draft the bylaws of your SAS in order to prevent disputes between partners: exit clauses, right of first refusal, voting and internal governance. Read the guide →

Silla vacía en la cabecera de una mesa de junta, con una carpeta cerrada en ese puesto

Liability of directors and officers

Liability of the legal representative and the directors When the legal representative or a company's directors and officers are personally liable, and how to document decisions in order to limit that risk. Read the guide →

Lista numerada, documento de constitución y sello corporativo en secuencia sobre un escritorio

Incorporating a SAS

Incorporating a SAS in Colombia: 13 steps A practical guide with the complete process for incorporating a SAS, from drafting the bylaws through to obtaining the NIT (tax ID number) and the commercial registration. Read the guide →

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