Financial Statements to approve mergers, spin-offs and capital reductions
The Superintendence of Companies (the “Superintendence”) issued the Concept No. 220-101268 of July 29, 2021 (the “2021 Concept”) by means of which it was established, among other matters, certain criteria regarding the extraordinary financial statements used to approve (i) mergers, (ii) spin-offs and (iii) capital reductions with effective reimbursements (the “Bylaws Amendments”).
The Concept aforementioned establishes that in order to use extraordinary financial statements to approve the Bylaws Amendments the following considerations must be taken into account (i) the maximum period of one month as of the date in which the operations should have taken place, that the entity has to conduct the corresponding accounting entries (article 2 of Section 1 of the Annex 6 of Decree 2270 of 2019), (ii) the maximum period of one month as of the date of the summon to the meeting of the highest corporate body (pursuant to what establishes the aforementioned Decree and to the External Legal Circular of 2017) and (iii) the maximum term to exercise the inspection right, pursuant to the type of legal vehicle and the bylaws provisions.
Regarding the aforementioned the Concept mentions the following example:
- Maximum date to hold the meeting: August 24, 2021.
- Maximum date to summon the meeting: July 30, 2021.
- Date in which it will be concluded the accounting entries in the corresponding books to verify the monthly balances: June 30, 2021.
- Maximum date of issuance of the extraordinary financial statements: May 31, 2021.
In the following link you will find the Concept No. 220-101268 of July 29, 2021.
On the other hand, the Superintendence in Concept No. 220-118627 of July 23, 2020 established the criteria to be taken into account in order to use the year end financial statements, to approve the Bylaws Amendments.
The Concept aforementioned establishes that year end financial statements can be use to approve the bylaws amendments provided that the ordinary meeting is held within the first three months of the year.
In the following link you will find the Concept No. 220-118627 of July 23, 2020.
Author: Raúl Vargas I rvargas@lloredacamacho.com I Corporate Law