The Auditor's Role in Colombia for simplified joint stock companies - SAS

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"The role of the auditor for the fiscal in colombia simplified joint stock companies, s.a.s."

TABLE OF ONTENTSGLOSSARY: "AND RELATED TERMS S.A.S."SUMMARY: "S.A.S. AND OTHERS"INTRODUCTION: "S.A.S. AND OTHERS"Justification: "S.A.S. AND OTHERS"                                                                                     

1. Description of the rules "S.A.S."And the rules on societies in general, with regard to the need for an Auditor
1.1 Act 1258 of 2008 and Decree 2020 to 2009.
1.2 Commercial Code
1.3 Law 222 of 1995
2. Analysis of the advantages and disadvantages of standards issued on SAS
2.1 Advantages
2.2 Disadvantages
3. The importance of auditor in the SAS
3.1 The importance of Auditor
3.2 Functions of the Fiscal Audit

4 CONCLUSIONS AND RECOMMENDATIONS
4.1 Conclusions
4.1.1. Conclusions of the review of standards
4.1.2. Conclusions of the advantages and disadvantages of SAS
4.1.3 Conclusions of the security representing the Auditor to stakeholders.
4.1.4 Conclusion on the work done and the contribution it provides personal knowledge
4.2 Recommendations

REFERENCES

ANNEXES

LIST OF ANNEXES

ANNEX 1. Model bylaws for the creation of a society

Simplified stock. (Model designed by Dr.

Francisco Reyes Villamizar).

ANNEX 2. Model Tax Auditing contract.

GLOSSARY

AUDITOR: 

Is the professional who is appointed to rule independently on the financial statements.

The primary concern of the External Auditor, is whether the financial statements are free of material misstatement of relative importance.

Certified Public Accountant: 

Is the person, who despite not having a college degree, met the requirements of the legislature to be recorded and become vested in the business card that entitles you to practice the profession on an equal footing with the graduates.

Certified Public Accountant: 

Is  the natural person who, by registration attesting to their expertise in terms of Act 43 of 1990, is empowered to public faith of events within their own profession, opinion on financial statements and perform other related activities with science in general accounting.

Registration as a Certified Public Accountant shall be attested by a professional card to be issued by the Central Board of Accountants.

To be registered as a CPA, you must be a Colombian national, in the exercise of civil rights or alien domiciled in Colombia with no less than three (3) years prior to the relevant application for registration and that meets the following requirements. Haber obtained the title of Public Accountant in a Colombian university authorized by the government to confer such a title, according to the regulations of university education in the field, plus proven experience in technical activities related to accounting in general not less than one (1) year and acquired simultaneously with graduate or post them.

DISMISSAL OF THE LEGAL PERSONALITY: 

Is the same raid on the personality or piercing the corporate veil, which is intended to deal effectively with the maneuvers that far from focusing on the satisfaction of social order, are moving to comply with the partners' personal interests, denaturing the form of company and using it as a tool to ignore the rights of third parties.

OPINION: under Article 38 of Act 222 of 1995:

"They are audited those financial statements certified to be accompanied by the professional opinion of the Auditor or, failing this, an independent public accountant that has examined in accordance with generally accepted auditing standards.

These statements should be signed by that professional, putting the words "see attached opinion" or similar. The meaning and scope of its signature shall be as stated in its opinion, * (which contain at least the demonstrations required by the regulations) *. (...). "

Of this provision that, among other things, that the opinion of the certified financial statements it corresponds to a single independent public accountant and exclusively in the absence of the Statutory Auditor.

FISCAL AUDITOR: 

Delegatee is a partner to exercise permanent inspection administration and validate the reports present, must submit reports to them in the statutory meetings. The Auditor, an auditor can not exactly be pigeonholed into any of the categories of audit, since it has characteristics of one or other, fitting only in the comprehensive audit.

RESPONSIBILITY FOR DEVELOPMENT: 

Joint liability of the partners of a joint taxation, means that they have to respond to your estate for the taxes the company owed the state.

So far there is nothing special and different from the responsibility of every member meet the obligations that the company purchased with others.

The large difference in tax and several liability of partners is that they respond endlessly to their participation in society.

Regarding taxes, there is no Liability under commercial law, under which one partner responds to the amount of their contributions. This basic principle has no validity whatsoever in relation to tax debts.

Does this mean that a member must respond to your estate for taxes due from society in proportion to their participation, regardless of the value it deserves due exceeds the amount of their participation in society.

SAS: New type of society we reevaluated the Colombian corporate system under new regulatory guidelines. (Act 1258 of 2008).

ABSTRACT

This work is aimed at a review of standards on the new model of companies, joint stock company called simplified - SAS and the rules on companies in general in relation to the legal necessity of having an Auditor.

We analyze the advantages and disadvantages of the law 1258 of 2008 by which gave rise to the SAS and its regulatory decree 2020 of 2009.

The aim of this paper is to highlight the importance of Auditor SAS in societies and the law does not require to have it when not below the threshold of Act 43 of 1990 and in particular the provisions of paragraph 3 of Article 203 of the Code of Commerce.

This paper develops a methodology to document, through articles, videos, concepts, standards, bibliographic sources, and archival.

We conclude that although there is no legal requirement to have in the SAS Auditor, if not exceed the limits established in Law 43 of 1990, if it is of utmost importance to have this, when the directors of the company is not on top of all partners, as a guarantee for all partners to the state, suppliers and society in general, as a sound measure that ensures transparency in its operations.

Keywords: SAS, Law 1258, 2008, Regulatory Decree 2020 of 2009, Auditor, External Auditor, Simplified Corporations, Independent Public Accountant, Certified Public Accountant, Rules Governing the SAS.

INTRODUCTION

With the 1258 Act December 5, 2008, was given legal life to Simplified Corporations (SAS.), this law has brought much controversy, especially in the present case, that raised by Article 28 together with the provisions of section 1 of Article 203 of the Code of Commerce.

The simplified joint stock companies, as its name suggests is of characteristics of a simplified corporate structure, where its regulation is subject to the provisions of the shareholders, legal rules apply to corporations only in the absence of consecration in the statutes social.

With the enactment of Law 1258 of December 5, 2008, not all would be required to appoint SAS Auditor therefore require only a "Independent Public Accountant" at the end of the year to audit their financial statements, as provided in Article 28.

This paper develops a methodology to document, through articles, videos, concepts, standards, bibliographic sources, and archival.

Of the SAS, would only be required to have Auditor, those which are trading companies, whose gross assets at 31 December of the previous year or exceed the equivalent of five thousand minimum wages and / or whose gross income during the previous year or exceed the equivalent of three thousand minimum wages, required to have Auditor. (Paragraph 2 of Article 13 of Act 43 of 1990).

For the development of this work is the limitation that is a very new in Colombia and Latin America and there is not much literature on it.

This paper aims to demonstrate the importance and necessity of the Auditor on all SAS, show that the Auditor is a guarantee for the partner, where the directors of the company is at the top of all of them also a guarantee to society and government and provides transparency and confidence in them, for contractors, employees, suppliers, etc.

For this work, an analysis of the rules issued on the SAS and its characteristics, we analyze the advantages and disadvantages of the law 1258 of 2008 and decree, the rules of the Commercial Code and the Law 43, 1990.

After some considerations about the inconsistencies of regulation on the simplified joint stock companies and justifies the importance or necessity of the auditor in the SAS.

To finally demonstrate that the Auditor, in simplified joint stock companies - SAS, is a guarantee for shareholders, society and government and also provides transparency and confidence in them, for contractors, employees, suppliers, etc.

1.    AREA

Statutory Auditor.

2.    IDENTIFICATION

                     

Demonstrate the importance and necessity of the auditor in all SAS. (Simplified joint stock companies).

3.    PROBLEM FORMULATION

With the 1258 Act December 5, 2008, was given legal life to Simplified Corporations (SAS), this law has brought much controversy in the present case, that raised by Article 28 in conjunction with the provisions paragraph 1 of Article 203 of the Code of Commerce.

The simplified joint stock company as its name suggests is of characteristics of a simplified corporate structure, where its regulation is subject to the provisions of the shareholders, to apply the legal rules of public companies only in the absence of consecration in the bylaws , which denotes the imperative but not dispositive of the said regulations.

With the enactment of Law 1258 of December 5, 2008, not all would be required to appoint SAS Auditor therefore require only a "Independent Public Accountant" at the end of the year to audit their financial statements.

Of the SAS, those which are trading companies, whose gross assets at 31 December of the preceding year or exceed the equivalent of five thousand minimum wages and / or whose gross revenue for the year immediately preceding or exceed the equivalent of three thousand minimum wages, required to have Auditor. (Paragraph 2 of Article 13 of Act 43 of 1990).

This paper aims to demonstrate the importance and necessity of the auditor in all SAS.

4.    OBJECTIVES
General 4.1 Objective

Demonstrate that the Auditor, in simplified joint stock companies - SAS, is a guarantee for the members, the society and government and also provides transparency and confidence in them, for contractors, employees, suppliers, etc.

4.2. Specific objectives

●  Make a description of the rules issued on the SAS and its characteristics.

●  Analyze the advantages and disadvantages of the law 1258 of 2008 and its implementing decree and rules of the Commercial Code and Law 43 of 1990.

●  Demonstrate that the Auditor, in simplified joint stock companies - SAS, is a guarantee for the members, the society and government and also provides transparency and confidence in them, for contractors, employees, suppliers, etc.

5.    JUSTIFICATION.

This work is done as a contribution to the discussion, noting that a new issue in Colombia, which have created many such companies and that the legislation and case law on this subject, are still largely unknown.

6.    FRAMEWORK

6.1. Conceptual framework

●      Auditor

●      External Auditor

●      Certified Public Accountant

●      Certified Public Accountant

●      Guaranty

●      Opinion

6.2 Legal Framework

Mainly discuss the latest standards issued, which affect the work of the Statutory Auditor in the simplified joint stock companies - SAS.

The second paragraph of Article 28 of Law 1258 of 2008, referred to as a requirement that financial statements are audited by independent public accountant, due to the presence of the auditor in the simplified joint stock companies is not mandatory but where those obtained amounts of assets or income referred to in paragraph 2 of Article 13 of Act 43 of 1990. If the argument is admissible which, when simplified joint stock company, a type of company limited by shares, it is bound to have a statutory auditor (Art. 203 No. 1, CC), devoid of any sense that the second paragraph of said Article 28 imposes the obligation to report financial statements by an independent public accountant, when simply this work, in compliance with Article 38 of Act 222 of 1995, correspond to the auditor.

7. METHODOLOGY

This paper develops a methodology to document, through articles, videos, concepts, standards, bibliographic sources, and archival.

JUSTIFICATION

This work is done as a contribution to the discussion, noting that a new issue in Colombia, which have created many such companies and that the legislation and case law on this subject, are still largely unknown.

Colombia is the first country in Latin America according to (Francisco Reyes Villamizar, conference "The businessmen prefer to SAS, June 24, 2009), in taking the bold step of radically modernize the system of business law.

This has been one of the most important provisions that have been created corporation, the Colombian legal history. According to Francisco Reyes Villamizar in the first five months of validity of the law 1258 of 2008 has created more than 3200 simplified joint stock companies.

It is clear that many of the classic Corporations have long been operating in our economy, think now transformed into SAS.

The law 1258 of 2008 provides that in case you need to provide the position of auditor, the person holding that office shall be certified public accountant with current business card.

It further stipulates that in any case the profits are justified in financial statements prepared in accordance with generally accepted accounting principles and audited by an independent public accountant. Audited by an independent public accountant who is not the auditor, which is inconsistent with the provisions of Article 38 of Act 222 of 1995 established that rule for the auditor's financial statements, previously certified public accountant and the legal representative (Article 37 of Act 222 of 1995).

Decree No. 2020 of 2009 provides even more retrograde than is Article 2 wherein it is clarified that if a SAS ever need to appoint an Auditor, the Auditor can not only be a Certified Public Accountant as it reads the Article 28 of Law 1258, but the charge may also take the Certified Public Accountants. This article in our concept is unconstitutional, because a decree to be of lower quality that the Act is modifying it, no rinsing and also referring to a type of practitioner that no longer exists or if there are very few.

Article 13 of Act 43 of 1990 provides that in addition to the requirements of previous legislation, you must have quality public accountant in the following cases:

●      Because of the charge

●      To perform the duties of auditor, external auditor, internal auditor in all kinds of companies, for which the law or social contract so determine.

With this rule, when the SAS did not have statutory auditor, an independent public accountant to act as external auditor an opinion the financial statements (financial audit) based on which presented the draft distribution of profits or accumulated losses enjugación, Law 222 required in 1996.

This new corporate model, further facilitates the formation of business partnerships, which will make it easier for drug dealers abound in our country, continue to commit criminal activity, because the authorities have long found that these offenders are widely used figure of shell companies, especially corporations, on which, chambers of commerce do not provide information on who owns them. Besides the fact of not being required to have Auditor further facilitates money laundering of such societies, the absence of a monitoring body to ensure its purpose, source of capital and legal business, in addition to the law 1258 of 2008 does not limit the development of any activity.

The frames used for the development of this paper are the conceptual and legal framework.

This paper is intended to stress the importance for all types of Company, be assured of the Statutory Auditor.

1. DESCRIPTION OF THE SAS RULES AND RULES FOR COMPANIES IN GENERAL, WITH RESPECT TO THE NEED FOR A TAX AUDITOR

1.                               Law 1258 of 2008 and Decree 2020, 2009

With the 1258 Act December 5, 2008, was given legal life Society

Simplified Stock (SAS), this law has brought controversy.

One of the controversies generated has given rise to Article 28 of the above Act, which states:

“Article 28. Tax inspection. - In case of requirement of the law have to provide the position of auditor, the person holding that office shall be certified public accountant with current business card.

In any case the profits are justified in financial statements prepared in accordance with generally accepted accounting principles and audited by an independent public accountant.

Decree 2020 of June 2, 2009, ends the debate as to whether the SAS Auditor required to have by the mere fact of being Corporations or if required only when caps are exceeded Act 43 of 1990. The government accepted this latter view, a position which was embodied in Articles 1, 2 and 3 of the Decree mentioned above.

“Section 1. In accordance with the provisions of Article 28 of Law 1258 of 2008, the simplified joint stock company is only obliged to have Auditor when (1) meet the budgets of assets or income for the purpose mentioned in paragraph 2 of Article 13 of Act 43 of 1990, or (ii) if another special law so requires.

Article 2, They may also be elected as Auditor Simplified Stock Company, CPAs duly registered with the Central Board of Accountants.

Article 3. When a simplified joint stock company is not bound to be Auditor, certificates and opinions that must be issued by it may be by an independent public accountant. "

The second paragraph of Article 28 of Law 1258 of 2008, referred to as a requirement that financial statements are audited by independent public accountant, due to the presence of the auditor in the simplified joint stock companies is not mandatory but where those obtained amounts of assets or income referred to in paragraph 2 of Article 13 of Act 43 of 1990.

If you consider that the simplified joint stock company is a corporate type of action, it would be forced to have Auditor (No. 1, Article 203 CC), devoid of any sense that the second paragraph of said Article 28 imposes an obligation dictate the financial statements by an independent public accountant, when simply this work, in compliance with Article 38 of Act 222 of 1995, correspond to the auditor.

1.2 COMMERCIAL CODE

According to José Israel Trujillo del Castillo, CPA and expert commentator Upgrade, paragraph 1 of Article 203 of the Commercial Code was amended by Act 1258 of 2008 for legal hierarchy, the Commercial Code is a decree and application shall become law always superior.

Paragraph 1 of Article 203 of the Commercial Code states:

"ARTICLE 203. <COMPANIES ARE REQUIRED TO HAVE TAX AUDITOR>. 

Auditor must have:

1) The joint-stock companies;

2) Branches of foreign companies, and

3) The companies in which, by law or by statute, the administration is for all partners, where so provided in any number of excluded members of the administration which constitute not less than twenty percent of the capital.

As a suggestion. Po the interpretation of this article should be taken into account the provisions of Article 13, paragraph 2o., Law 43 of December 13, 1990, which states: "have a statutory auditor is mandatory in all commercial companies, of any nature, whose gross assets as of December 31 immediately preceding year or exceed the equivalent of five thousand minimum wages and / or whose gross revenue for the year immediately preceding or exceed the equivalent of three thousand times the minimum wage. "

As a suggestion. Pinterpreting ara of this article should be taken into account the provisions of Article 20, paragraph 1st., Law 45 of December 18, 1990, which states: "Any financial institution subject to supervision and monitoring of the  Banking and those subject to control and monitoring of the National Securities Commission, whatever its nature, must have an auditor appointed by the General Assembly of Shareholders or by the competent authority. The Auditor shall perform the functions envisaged in the Second Book, Title I, Chapter VIII Commercial Code and be subject to the provisions therein, subject to the requirements of other standards".

As the utilities were justified in financial statements prepared in accordance with generally accepted accounting principles and audited by an independent public accountant, Law 222 of 1995 states that are audited financial statements, those which carry the Auditor's opinion and absence, of an independent public accountant.

1.3 Law 222 of 1995

“ARTICLE 38. AUDITED FINANCIAL STATEMENTS. Partially unconstitutional.

                                                                                                                    

Those financial statements are audited certificates that accompany the professional opinion of the Auditor or, failing this, the independent public accountant that has examined in accordance with generally accepted auditing standards.

These statements should be signed by that professional, putting the words "see attached opinion" or similar. The meaning and scope of its signature shall be as stated in its opinion, containing at least the  statements required by regulation.

When financial statements are presented in conjunction with the annual report of the directors, the auditor or independent public accountant shall include in his report his opinion as to whether they exist between them and the proper consistency.

Court: Art. 38 subsection 2, audited financial statements, CONSTITUTIONAL the expression "the meaning and scope of its signature shall be as stated in its opinion, but unconstitutional the phrase that says" containing at least the statements required by the rules, " 44, issue regulations, in part unconstitutional (Constitutional Court ruling C-290 of June 16, 1997, Judge Jorge Arango Mejía rapporteur, jyd 8 / 97, p. 1195) "

It is noteworthy that the SAS rules conform to the provisions of Article 38 of Act 222 of 1995.

2. ANALYSIS OF THE ADVANTAGES AND DISADVANTAGES OF THE RULES ISSUED ON SAS.

2.1 Advantages

●   The simplified joint stock company (SAS) could be established with any amount of social capital (below or above the 500 minimum wages, which was the top was talking about the law 1014 of 2006) and with any number of employees (below or above the 10).

●   As the number of shareholders, Simplified Corporations can set up and operate one or more shareholders (be they legal or natural person, as stated in Article 1).

●   Document created by private, rather than gain a Deed (article 5), this is a great attraction for these companies, which makes economic and functional constitution. The document of incorporation must be signed by all partners and will be determined prior to authentication entry in the Register of the Chamber of Commerce, for those involved in your subscription. Such authentication may be made directly or by proxy.

●   The duration of the SAS, may be indefinite.

●   Also they are not required as other companies regulated by the Commercial Code have to specify the object to be devoted, for if not listed, it is understood that the company may conduct any lawful activity (see paragraph 5 of Article 5 of Act 1258 of 2008).

●   The shareholders of the SAS, as shareholders of other corporations, have no joint liability (ie, beyond their contributions) in the business debts, tax or any other nature incurred by the society. Except as provided in Article 42 of Act 1258 which provides for the dismissal of its legal form, when using the simplified joint stock company, in fraud of the law or on third parties, shareholders and managers who have conducted, participated or defraudatorios acts provided, shall be jointly liable for the obligations arising from such acts and the damage caused.

●   The declaration of nullity of the acts defraudatorios be advanced to the Superintendency of Companies, through verbal summary procedure.

●   The action for damages that may be required for any damages arising from acts defraudatorios be competition, prevention, the Superintendency of Companies or specialized circuit civil judges, and in the absence of these, by the Circuit Civil address of the applicant, by the processing of the verbal record.

●   Article 3 of the 1258 Act provides that for tax purposes, the simplified joint stock company is governed by the rules applicable to corporations.

●   Furthermore, the SAS were not required to have all the organs of administration which they are required to corporations governed by classical Commercial Code (Shareholders and Board), it is sufficient to have only their legal representative (see Section 7 of Article 5 of Law 1258).

●   Moreover, if operating with a single shareholder, this can be both legal representative (see paragraph of Article 17 of the Act). And if the statute provides for the creation of a "Board" in this case so unusual is that the 1258 law states that the "Board" can be formed with "one" member (see Article 25, paragraph law).

●   Article 9 of the 1258 Act provides that the SAS are not subject to minimum capital coverings subscribed and paid-up capital they are required to classical corporations governed by the Commercial Code. Furthermore, according to the same article, to shareholders of SAS not give you one, but two years later to pay for the capital (cf. as described in section 387 of the Commercial Code).

●   Not all will require SAS Auditor, benefit from the cost standpoint.

●   One of the most important issues within the regulations that govern the operation of the new SAS is referred to in Article 28 which provides that in case of requirement of the law have to provide the post of Auditor, the person that office must be certified public accountant with current business card.

●   Profits should be justified in financial statements prepared in accordance with generally accepted accounting principles and audited by an independent public accountant.

●   For foreign investors are more familiar figure of the external audit. The Act 1258 of 2008 which also seeks to harmonize with international law on the subject.

According to Francisco Reyes Villamizar, until December 2008, foreign companies entering the country and constituted as joint stock companies should do all sorts of juggling to meet the five members required by this figure, either creating or incorporating subsidiaries as shareholders who did  not really have this condition. However, the approval in mid-December 1258 law removed several of these wasteful processes by enabling the creation in the country of the simplified joint stock companies, SAS.

This means that foreign companies wishing to establish a branch in Colombia, they can do with a single partner, ie only with them, without having to seek shareholder in the country, often fictitious, resulting in return on investment foreign country.

2.2. DISADVANTAGES

●   Counters no longer afford each month to the SAS. service "Statutory Auditor" but will only do at the end of the year, as external auditors to be able to dictate the financial statements.

●   An Auditor or Internal Auditor, audit firms on an ongoing basis, instead of the External Auditor in the standard, is sporadic and therefore his work will have a shorter range.

●   This new corporate model of the SAS even easier to forming business partnerships, which will make it easier for drug dealers abound in our country, commit further criminal activity, because the authorities have long found that these offenders are widely used Figure of shell corporations (especially corporations, which are not advertising in the chambers of commerce on who are its owners) to do their washing operations.

●   They can not trade stocks or securities in the public and not appear on the National Registry of Securities and Intermediaries.

●   Observed in the standard deprotection of public interest, not having control of an auditor.

●   The twenty-third article of the law 1258 of 2008, we may assume that violates all the precepts of corporate democracy by allowing the splitting of the vote, through this mechanism or major shareholders acquired the power to manipulate the decisions, violating the application electoral quotient in the designation of bodies, a substantial breach of the rights of minorities, which goes against current legislation and violates the right to equality with other partners.

●   As for the "enervation of the grounds for dissolution", the Technical Board of Accounts, in its observations on the bill, spoke on this point by setting its position to defer the settlement of the company for up to two years generates economic risks to the social partners that interact with society and establishes conditions of social irresponsibility, where he eventually require sacrifices from the workers, lenders, insurers, providers and the State itself, to allow operation of a corporation without any financial support To fulfill its obligations, but have even more control of the Statutory Auditor to safeguard the interests of employees, creditors, suppliers and the state.

3. THE IMPORTANCE OF FISCAL AUDITOR IN SAS

3.1 THE IMPORTANCE OF FISCAL AUDITOR

Auditor's role is that it has a permanent monitoring and analysis to protect, conserve and monitor the companies' capital to be used properly and efficiently and that operations run as efficiently as possible, ongoing surveillance for administrative acts, at the time of execution and performance, comply with the objects of the company and the legal, statutory and regulatory provisions, so that no irregularities occur at the expense of shareholders, the third and the company itself.

Make a consistent inspection on the management of account books, minute books, accounting records and archives in general, to ensure that the records made in the book are correct and meet all the requirements of the law, so that Documents can be stored properly support economic events, the rights and obligations of the company, as a basis to accounting information are the same.

Issue certificates and reports on financial statements, working with governmental regulation and control.

The Superintendency of companies 115-000011 external circular issued on 21 October 2008, which fixes its position on various issues related to tax inspection.

States that the Statutory Auditor plays a particularly important role in the life of the country, to the extent that work effectively, independently and objectively, it provides confidence for investment, savings, credit and generally contributes to the dynamism and economic development . As a private body to audit the Auditor is structured with the aim to give confidence to business owners on the submission of the administration to legal and statutory standards, the assurance of financial reporting, as well as on the protection and conservation of corporate assets, in addition to the conduct to be observed in search of the reasonableness of the financial statements.

The Superintendence also says that the functions of Auditor duly exercised, otherwise protect third parties who are in the equity of the economic entity's general pledge of their claims, so that should give confidence about managing resources saving , investment and generally fair and equitable management of the country's productive apparatus.

Added after the institution of the Statutory Audit is a vital support for entities engaged in the inspection, supervision and / or control of corporations, their functions have been assigned by law, such as to ensure the compliance with laws and agreements between individuals (Laws and decisions of governing bodies) and provide public faith, which means among other things, that his attestation and signature will be legally presumed, unless proved otherwise, that the act in question meets the legal requirements, as well as the statutory. In the case of balances, is also presumed that the balances have been taken faithfully from the book and reasonably reflect the financial position for the balance sheet date (Article 10 of Law No. 43 of 1990).

It is precisely this conceptual and policy environment in which the state realizes the importance of the statutory audit and, therefore, must offer full support and cooperation to what is in the success of his management audit, whose development should be equally rated by third parties, managers and business owners.

The regulatory framework for statutory audit is defined by Act 145 of 1960, Act 43 of 1990, the Commercial Code, Act 222 of 1995 and Decree 2649 of 1993, among others.

Trish said Gabriel Vasquez, Vanguardia Liberal columnist and Member of Baker Tilly Tax Colombia, the provisions of paragraph of Article 28 of Act 1258 of 2008, presents a discussion of tax returns, especially income. It will be reflected " tax profits, which should be "dictated by an independent public accountant.." Without discussing the subject of several comprehensive databases, the commercial utility if it can explain the origin of the net taxable income.

If this hypothesis is correct, then you should sign the auditor's statement of income, to substantiate the source of taxable income accounting, since the legislature generalized "profits" and the state tax collection is first interested in this item come from duly audited financial statements.

3.2 Role of Fiscal Audit

In accordance with the provisions of Articles 207 and 209 of the Commercial Code, the main functions of the Statutory Audit are:

1. Ensure that the transactions entered into, or are on behalf of society conform to the requirements of the statutes, decisions of the general assembly and board.

This involves the monitoring and analysis on the company's transactions within the scope of their expertise by ensuring they comply with the statutes and decisions of the competent corporate bodies.

2. Give appropriate consideration, in writing, to the assembly or board of trustees, the board of directors or manager, as appropriate, of the irregularities that occur in the functioning of society and the development of their business.

This implies that the present Auditor, in writing and legally to whoever holds the power to make decisions preventive or corrective measures where necessary, assessments and recommendations to prevent administrators or other officials of the audited entity incurred or persist in acts irregular, illegal or contravene the orders of higher social bodies. To meet this end, reports, recommendations and actions in general must be made in due course.

Some irregularities should be reported are:

●   Abuses its management or administration, implying recognition of the rights of the partners or serious or repeated violation of laws or rules.

●   Retail provision, the Superintendent or any state agency, information that does not conform to reality.

●   Do not keep books or books in accordance with the law or generally accepted accounting principles.

●   Performing not included in its objects

1.       Collaborate with government agencies engaged in the inspection

supervision or control of companies, and submit reports that may be required or requested of it;

This duty of cooperation is based on the importance of the functions of the Auditor, which go beyond the private sphere and the sole interest of the entity and its partners, have relevance in the social field and impact on the economic order, especially for the case of entities supervised or controlled by the Superintendency of Companies. In furtherance of the foregoing, it is for the Auditor to give their support to oversight, at their request, within the scope of its competence, in the form and the opportunity that it is required.

2.    Ensure that regularly carried accounts of the society and minutes of meetings of the assembly, board members and board, and duly preserved because society correspondence and records of accounts, giving the instructions for such purposes.

This feature requires verification against the criteria and procedures for keeping records of the society, the inspection on the management of account books, minute books, accounting records and files to ensure that records are made correct and meet all the requirements of the rules, so it can verify that documents are properly maintained to support economic events, the rights and obligations of the company, which constitute the foundation of accounting information the same.

3.     Regularly inspect the goods of society and seek to take timely conservation measures or safety of themselves and she takes into custody in any other manner.

To properly fulfill this function, the Auditor must verify that they exist and are adequate control measures for the protection of assets, in order to verify their upkeep and maintenance, with periodic checks for the existence of assets and its adequate protection, usability, or recovery, including in its analysis not only physical factors but also legal and economic.

4.       Provide instructions, practice inspections and request the necessary reports to establish permanent control over social values.

As a result of the management in accordance with the function mentioned in the preceding paragraph, in exercising this function, when the Auditor finds deficiencies in the measures pursued by the Administration for the management and control of social goods must make recommendations which are relevant to improving the effectiveness and efficiency of control over property and social values, methods and procedures. Additionally, you must follow regarding the assessment and actions taken by administrators address these recommendations, which shall record in writing.

5.       Authorize signing any balance to be made, with their opinion or report.

This function entails the expression of the Auditor's professional opinion on the reasonableness of the financial statements. It should be noted that to comply fully with this work, the auditor should be fully independent, ensuring the impartiality and objectivity of his trial.

6.       Convene the meeting or the shareholders' meeting special meetings when deemed necessary.

7.       Perform such other functions as are specified in laws or statutes and which are compatible with earlier requested by the assembly or board members.

Regarding the possibility of granting additional powers to the Auditor the above, it is pertinent to note that in any case they must be consistent with the nature of its function and maintain independence, objectivity and impartiality, avoiding situations that could lead to conflicts of interest.

8.       Check for and appropriateness of internal control measures, maintenance and custody of assets of the company or of third parties are held by the company.

In its analysis, the Auditor should assess whether the internal control system of the audited entity, promotes the efficiency of the same, reduces the risk of loss of operational and financial assets, promotes the development and dissemination of high quality financial information that shows the results of the resource management of the economic entity and the significant risks that affect it, in a way that is useful for users of this information when making economic decisions. "

The above considerations are valid especially for simplified joint stock companies that have multiple partners, which the administration of them, not on top of all partners, or those in which the administration has been delegated to third parties. Also taking into consideration that the simplified joint stock companies are subject to inspection, supervision or control of the Superintendency of Companies, according to relevant legislation, is considered to be met by the same guidelines.

Furthermore, Article 45 of Act 1258 of 2008 establishes the default rules of it, among which are the rules for corporations and the rules that govern corporations under the Code of Commerce.

"ARTICLE 45. REFERRAL. In matters not covered by this Act, the simplified joint stock company is governed by the provisions of the bylaws, by the legal rules governing the corporation and, alternatively, as non-conflicting, by the provisions principles governing the societies under the Code of Commerce. Also, the simplified joint stock companies are subject to inspection, supervision or control of the Superintendency of Companies, as the relevant legal standards. "

4. CONCLUSIONS AND RECOMMENDATIONS

4.1 Conclusions
4.1.1. CONCLUSIONS OF THE ANALYSIS OF RULES

It is clear that unlike traditional corporations regulated by the commercial code, new SAS will not require having a Statutory Auditor, by the mere fact of being joint-stock companies (see paragraph 1 of Article 206 of the Commercial Code) but should only be the Auditor by the demands of special laws such as paragraph 2 of Article 13 of Act 43 of 1990, which requires appointing Auditor when commercial companies over a certain level of assets or gross income.

The law 1258 of 2008 is clear when it states that an "Independent Public Accountant" (ie, an external auditor is not the same as the Auditor) is who dictate the Financial Statements for profit sharing basis.

On this point the Superintendence Office issued 220-039060 of 11 February 2009, concluding at the end: "In this vein, and to respond to your query, it must be concluded that when section 28 of Act 1258 of 2008 states that "In case of requirement of the law have to give the office of auditor, the same being forwarded to the provisions of paragraph 2 of Article 13 of Act 43 of 1990, so that societies simplified actions will only be required to have Auditor, when they meet the Bank's assets or income referred to in the said paragraph. "

4.1.2. CONCLUSIONS OF THE ADVANTAGES AND DISADVANTAGES

The simplified joint stock companies have very flexible characteristics that facilitate the gradual transformation of many societies formed under the traditional forms of association to the figure of SAS, the flexibility offered by this new type of corporation, the prevalent concept of society- contract, which is above the autonomy of the partners on the rules of order imperative that abound in the regulation of companies that predated the law.

Issued rules prevent conflicts within society, ability to freely stipulate the conditions under which govern the relationship of partners and can foresee in advance the conditions under which future disputes will be resolved.

With the issuance of Decree 2020 of 2009, accountants have been providing their services Statutory Corporations Tax in Classic, but with assets and incomes below the limits established in Act 43 of 1990, they will lose their jobs in such companies as many of them will prefer to become SAS to save the cost of the Statutory Auditor.

By requiring only the opinion at the end of the year, if there are profits, they will be affected further Accountants fees, fees that already are very small, being permanent presence as auditor.

4.1.3. TERMINATION OF THE WARRANTY OF TAX AUDITOR OF INTEREST GROUPS.

The continued presence as Independent Public Accountant or Auditor, is important as a guarantee of all stakeholders in society, especially when in Colombia are many paper companies and drug companies, making it easier to continue committing their criminal activities and washing operations.

4.1.4. CONCLUSION ON THE WORK AND CONTRIBUTION TO THE KNOWLEDGE THAT PROVIDES PERSONAL.

The issue of simplified joint stock companies, is a recent and very novel issue on which there is much literature on it. The person most knowledgeable about the SAS, is Dr. Francisco Reyes Villamizar, a former superintendent of companies, who prepared the draft legislation which resulted in the enactment of Act 1258 of 2008 and author of "SAS - The simplified joint stock company" .

Although Dr. Reyes Villamizar is the position of the Statutory Auditor is an "expensive bureaucracy and not always helpful," this monograph is another position in the sense that the Auditor is a guarantee for the partners and all stakeholders of society .

This paper provided a deeper understanding of this new type of society, makes clear that the important work of the Statutory Auditor should not be based solely on the law, but in the pledge of security it represents.

                                                    

4.2 Recommendations

Universities that have the power of Public Accounts, Central Board of Accountants, accounting firms and accountants in general, campaigns should be conducted with employers, on the guarantee that for them is having the ongoing advice of the Auditor.

Universities that have the power of Public Accounts, Central Board of Accountants, accounting firms should conduct awareness campaigns Public Accountants by mass media, the importance of responsibility and status they should give to his profession and his work, to be an added value for companies and society in general.

The state should exercise oversight over accounting firms, so they are not judge and jury, ie providing different services in the same company, in order that many professionals may have the opportunity to provide services and not present working concentration, leading to many professionals working for a very low fee.

REFERENCES

                                                         i.      Congress of Colombia - Law 1258 of 2008 -

                                                        ii.      Congress of Colombia - Commercial Code.

                                                      iii.      Congress of Colombia - Law 43 of 1990

                                                      iv.      Congress of Colombia - Law 145 of 1960

                                                       v.      Congress of Colombia - Law 222 of 1995

                                                      vi.      Presidency of the Republic of Colombia - Decree 2020 of 2009

                                                    vii.       Other

ANNEX 1.
MODEL STATUTE FOR THE ESTABLISHMENT OF A simplified joint stock company. (MODEL DESIGNED BY FRANCISCO REYES VILLAMIZAR)

ACT ESTABLISHING

(_______________), Nationality (_______________), (_______________), identified domiciled in the city of (_________________), states - prior to the establishment and the signing of these statutes, "have decided to establish a simplified joint stock company called (INCLUDE NAME), for any civil or lawful business activity, for an indefinite term of duration, with a subscribed capital of ($_______________), (_______________) divided into ordinary shares of nominal value ($_______________) each, have been released in its (wholly or in the share) upon delivery of the subscription amount corresponding to the designated legal representative and has a single governing body and representation, which is the legal representative appointed by this document.

Having made the above statement, the undersigned has set, likewise, the statutes of the corporation simplified by this act created.

STATUTES
Chapter I

General Provisions

Article 1. Form. - The company is constituted by this document is a simplified joint stock company, of a commercial nature, to be called (insert name) SAS, governed by the provisions contained in these statutes, the Act 1258 of 2008 and other provisions relevant laws.

In all actions and documents emanating from the society, for others, the name is always followed by the words "simplified joint stock company" or the initials "SAS."

Article 2. Purpose. - The corporation may make any lawful economic activity in Colombia and abroad.

The company may carry out, in general, all operations of whatever nature they may be, related to the object referred to, and any similar activities related or complementary or to facilitate or develop trade and industry of the society .

Section 3. Address. - The principal address of the company is the city of Bogotá DC (_______________) and address for service of process will (_______________). The company may establish branches, agencies or offices in other parts of the country or abroad, by order of the general assembly of shareholders.

Article 4. .- The term of duration is indefinite term.

Chapter II
Rules on capital and shares

Article 5. Authorized Capital.

- The authorized capital of the company is (include value), divided into one hundred shares of nominal value (include value) each.

Article 6. Subscribed Capital.

- The initial subscribed capital of the company is (include value), divided into (INCLUDE NUMBER) ordinary shares of nominal value (include value) each.

Article 7. Paid Capital.

- The paid capital of the company is (include value), divided into (INCLUDE NUMBER) ordinary shares of nominal value (include value) each.

Paragraph.

Form and terms in which they pay capital .- The amount of capital was paid in cash, within 24 months from the date of registration in the commercial register of this document.

Article 8. Rights conferred by shares.

- At the time of incorporation, all equity securities issued belong to the same class of common stock. For every action there is a vote in decisions of the general assembly of shareholders.

The rights and obligations of each share gives its holder will be transferred to those who acquires, made after its release to any title.

The property of an action involves adherence to the statutes and the collective decisions of the shareholders.

Article 9. Nature of activities

- The shares will be registered and shall be included in the book the company to keep under the law. While subsisting right of first refusal and other restrictions on their sale, shares may not be traded except under the particular provisions of these bylaws.

Article 10. Increase the subscribed capital

- The subscribed capital may be increased successively by all means and under the conditions provided in these bylaws and the law. The unsubscribed shares in the act of incorporation may be issued by decision of the legal representative, who will approve the respective regulations and make an offer on the terms that provide for regulation.

Article 11. Preemptive rights

- Unless otherwise decided by the general meeting of shareholders, approved by a vote of one or several shareholders representing at least seventy percent of the shares present at each meeting, the placement rules provide that the shares are subject to the right place preference, so that each shareholder can subscribe for a number of shares proportionate to the need on the date of the notice of offer. The right of preference also applies for the issuance of any other class titles, including bonds, mandatory convertible bonds into shares, shares with preferential dividend and no voting rights, the annual fixed dividend shares and preference shares.

First Paragraph.

- The right of first refusal under this article shall also apply on the assumption of universal transfer of assets, such as liquidation, merger and division in all its forms. Also, be no right of preference for the transfer of fractions at the time of the signing and transfer of the right of first refusal.

Second Paragraph.

- There shall be no right of first refusal in favor of society.

Artículo 12º. Classes and Series of Shares.

- By decision of the general assembly of shareholders, adopted by one or more shareholders representing all the shares subscribed, order the issuance of shares with preferential dividend and no voting rights, with an annual fixed dividend, payment or any others decide to shareholders, provided that they are consistent with legal standards. Once authorized for issue by the general assembly of shareholders, the legal representative shall adopt the relevant regulations, which establish the rights conferred by the shares issued, the terms and conditions that may be subscribed and whether shareholders will retain the right preference for subscription.

Paragraph.

- To issue preference shares, will require the respective privileges are approved at the general meeting by the affirmative vote of a number of shareholders representing at least 75% of the shares. The rules of placement of preference shares, to be approved by the general assembly of shareholders, shall regulate the right of preference in favor of all shareholders, so they can sign up to the number of shares each holds in the date of the notice of offer.

Article 13. Multiple voting.

- Unless otherwise decided by the general meeting of shareholders approved by 100% of the shares subscribed, not issued multiple voting shares. In case of multiple voting shares issued, the assembly shall, in addition to its issuance, the amendment to the provisions regarding the quorum and majority decision-making necessary to give effect to the establishment of multiple voting.

Article 14. Cash shares.

- In the case of shares issued for payment, the value representing the shares issued in respect of employees of the company shall not exceed the percentages specified in existing labor laws.

Shares may be issued without payment subject to preemptive rights, if so determined by the general assembly of shareholders.

Article 15. Transferring shares to a commercial trust.

- Shareholders may transfer their shares in favor of a commercial trust, provided that the shareholders registry book identifies the trust company, as well as beneficiaries of autonomous assets along with their corresponding percentages in the trust.

Article 16. Restrictions on stock trading.

- For a period of five years counted from the date of commercial registration of this document, the actions can not be transferred to third parties unless expressly authorized, adopted at the shareholders general meeting of 100 representatives % of shares. This restriction will lapse if there were a transformation, merger, division or any other transaction by virtue of which society becomes, or in any way, migrate to another kind of association.

The transfer of shares may be subject to restrictions in these laws are expected, as stipulated due to the desire of the founders to maintain cohesion among the shareholders of the company.

Article 17. Control Change.

- For those shareholders who at the time of incorporation or thereafter are or will be a corporation, the rules regarding change of control under Article 16 of Law 1258 of 2008.

Chapter IIICorporate bodies

Article 18. Corporate Bodies.

- The company shall have a governing body, called general meeting of shareholders and a legal representative. The statutory audit will be provided only to the extent otherwise required by current legislation.

Article 19. Society-turned-man.

- The corporation may be multi-person or proprietorship. While the company is a sole proprietorship, the sole shareholder shall exercise all the powers in law and the statutes it is entrusted to the various organs, including legal representation, unless designated for that purpose to a person who performs the latter charge.

Determinations for the management body that may be adopted by the sole shareholder on record must properly seated in the corresponding book of the society.

Article 20. General meeting of shareholders.

- The general meeting of shareholders or the shareholders are members of the society, meeting under the provisions on notice, quorum, majorities and other requirements of these statutes and the law.

Each year, within three months following the closing of the financial year to 31 December of the respective calendar year, the legal representative will convene a regular meeting of the general assembly of shareholders, in order to submit for consideration the accounts Year-end and the annual report and other documents required by law.

The general meeting of shareholders shall also have the functions under Article 420 of the Commercial Code, the provisions of these statutes and any other applicable legal standard.

The meeting will be chaired by the legal representative and if his absence, by the person nominated by the shareholders attending.

Shareholders may participate in meetings of the assembly, directly or through a power conferred on behalf of any person or entity, including the legal representative or any other individual, but with the status of employee or director of the company.

Shareholders deliberate under agenda set forth in the notice. However, shareholders can propose amendments to the resolutions submitted for approval and, at any time propose to revoke the legal representative.

Article 21. Convening the general meeting of shareholders.

- The general meeting of shareholders may be convened any meeting by itself or by the legal representative of society, by giving written notice to each shareholder with a minimum of five (5) working days.

In the first call may also include the date that will be a meeting of the second call, if not possible to conduct the first meeting due to lack of quorum.

One or several shareholders representing at least 20% of the shares subscribed to the legal representative may request to convene a general assembly meeting of shareholders, if they see fit.

Article 22. Waiver of notice.

- The shareholders waive their right to be called to a given session of the assembly, by writing to the legal representative of the company before, during or after the relevant meeting. Shareholders also waive their right of inspection by the same procedure.

Although they have not been invited to the meeting, means that shareholders who attend the relevant meeting have waived the right to be called, unless express their dissatisfaction with the lack of notice before the meeting takes place.

Article 23. Right of Inspection.

- The right of inspection may be exercised by shareholders during the year. In particular, shareholders will have access to all of the available financial information, accounting, legal and business related to the functioning of society, as well as figures for the remuneration of company directors. In furtherance of this prerogative, the shareholders may request all information deemed relevant to a decision, knowingly, of the determinations under consideration the highest corporate body as well as to the proper exercise of the rights attached to shares they hold.

Managers should provide them to shareholders, immediately, all the information requested to exercise its right of inspection.

The assembly may regulate the terms, conditions and schedules that such right may be exercised.

Article 24. Non-meetings.

- It may be held simultaneously or successively by communication and by written consent in the terms established by law. Under no circumstances will require a delegate of the Superintendent of Companies for this purpose.

Article 25. Quorum scheme and decisive majorities: 

The meeting will deliberate with a singular or plural number of shareholders representing at least half plus one of the subscribed shares with voting rights. Decisions are taken with the votes in favor of one or several shareholders representing at least half plus one of the shares entitled to vote present in the respective meeting.

Any reform of the bylaws require the favorable vote of 100% of the shares subscribed, including the following statutory changes:

(I) The modification of the provisions of Article 16 of the bylaws regarding the restrictions on disposal of shares.

(Ii) The performance of manufacturing processes, merger or division.

(Iii) The inclusion in the bylaws of grounds for exclusion of the shareholders or the modification of the provisions therein on the subject;

(Iv) The modification of the arbitration clause;

(V) The inclusion or exclusion of the possibility of issuing shares with multiple voting, and

(Vi) The inclusion or exclusion of new restrictions on stock trading.

Paragraph.

- Likewise, require unanimous determination of 100% of the shares subscribed, the determination regarding the assignment of assets under the terms of Article 32 of Law 1258 of 2008

Article 26. Splitting the vote: 

 In the case of election committees or other collective bodies, shareholders may split their vote. In case a board of directors, all members shall be appointed by a majority of the votes cast in the relevant election. To that end, those who intend to run draw up full plates containing the total number of members of the board. That iron having the greatest number of votes shall be elected in its entirety.

Article 27. Minutes.

- The decisions of the general assembly of shareholders on record will be approved by it, by individual persons delegated for that purpose or by a committee appointed by the general assembly of shareholders. If delegated the approval of the minutes at the committee, the shareholders may determine freely the conditions of operation of the college.

The minutes should include information about the date, time and place of the meeting, the agenda, the persons appointed as president and secretary of the meeting, the identity of the shareholders present or their representatives or attorneys, the documents and report submitted to the shareholders, the synthesis of the discussions held, the transcript of the proposals submitted to the assembly and the number of votes cast for, against and in white on each of these proposals.

The minutes shall be signed by the president and the secretary of the meeting. A copy of these proceedings and authorized by the secretary or by a representative of society, be proof of the facts which appear in them, until proven falsehood copy or record.

Article 28. Legal Representation.

- The legal representative of the corporation will be simplified by a natural or legal person, shareholder or not, who will not have alternates, appointed for a term of one year by the general assembly of shareholders.

The functions of the legal representative end in resignation or revocation by the general assembly of shareholders of death or disability in those cases where the legal representative is a natural person and if private or judicial settlement, where the representative Legal is a legal person.

The cessation of the functions of the legal representative for any reason, does not result in any compensation of any kind, different from those that may correspond in accordance with the labor law, if applicable.

Revocation by the general meeting of shareholders need not be substantiated and may be made at any time.

In those cases where the legal representative is a legal person, the duties shall be borne by the legal representative of it.

All remuneration to which he is entitled the legal representative of society, must be approved by the general assembly of shareholders.

Article 29. Legal representative's powers.

- The corporation shall be managed, administered and third parties legally represented by the legal representative, who will have no employment restrictions because of the nature or the amount of events held. Therefore, it is understood that the legal representative may enter into or perform all acts and contracts within the social order or that are directly related to the existence and functioning of society.

The legal representative shall be deemed vested with the broadest powers to act in all circumstances on behalf of society, except those powers which, in accordance with the statutes, has been retained by  shareholders. In relations to third parties, the company shall be bound by the acts and contracts concluded by the legal representative.

You are prohibited legal representative and the other directors of the company, either directly or through an intermediary, to obtain any form or legal form of loans from the company or obtain from society guarantee, bond or other security their personal obligations.

Chapter IV
Miscellaneous Provisions

Article 30. Global asset disposal.

- Means that there is global sale of assets when the company was proposing to dispose of assets and liabilities representing fifty percent or more of the company's net worth at the time of disposal. The global sale will require approval of the assembly, provided with the vote of one or several shareholders representing at least half plus one of the respective shares present at the meeting. This transaction will give rise to withdrawal rights for absent or dissenting shareholders if assets deteriorates.

Article 31. Fiscal year.

- Each fiscal year lasts one year, which begins January 1 and ends December 31. In any case, the first financial year shall run from the date on which occurs the commercial register of the instrument of incorporation.

Article 32. Annual Accounts.

- After the court of accounts of the end of calendar year, the company's legal representative submitted for consideration by the general shareholders' financial statements for each financial year, duly audited by an independent accountant under the terms of Article 28 Law 1258 of 2008. If provided the office of auditor, the report will be made by the person occupying the position.

Article 33. Legal Reserve.

- The company is a legal reserve amounting to at least fifty percent of the subscribed capital, formed with ten percent of net income each year. When this reserve gets above fifty percent, the company has no obligation to continue carrying this account ten percent of net income. But if declined, will seize the same ten percent of such profits until the reserve reaches the threshold again.

Article 34. Utilities.

- Profits are distributed based on financial statements for each financial year, after determination by the general assembly of shareholders. Profits are distributed in proportion to the number of subscribed shares that each shareholder holds.

Article 35. Conflict resolution.

- All disputes between the shareholders on account of the social contract, except as by law, shall be settled by the Superintendency of Companies, with the exception of the shares of challenging decisions of the general assembly of shareholders, whose decision shall be subject to arbitration, as provided in Clause 36 of these statutes.

Article 36. Arbitration Clause.

- The challenge to the determinations made by the general meeting of shareholders should be brought forward before an arbitration tribunal composed of one arbitrator, who shall be appointed by agreement of the parties or, failing that, by the Centre for Commercial Arbitration and Conciliation (). The arbitrator appointed attorney will be registered, fail to law and be subject to the rates provided by the Centre for Commercial Arbitration and Conciliation (). The Court of Arbitration will be held at Centre for Commercial Arbitration and Conciliation (), is governed by Colombian law and in accordance with the aforementioned rules of Conciliation and Arbitration Center.

Article 37. Applicable law.

- The interpretation and application of these statutes is subject to the provisions of Act 1258 of 2008 and other rules that are applicable.

Chapter IV
Dissolution and Liquidation

Article 38. Solution. 

- The company is dissolved:

1 ° On the expiration of the statutes, if any, except as may be extended by an instrument registered in the trade before it expires;

2 º Due to the impossibility of carrying out activities under the corporate purpose;

3 For the initiation of the process of liquidation;

4 For will of the shareholders adopted at the meeting or decision of the sole shareholder;

5 ° In order of competent authority and

6 ° by losses that reduce the company's net assets below the fifty percent of the subscribed capital.

First paragraph.

- In the case provided for in the first ordinal above, the solution will occur automatically after the expiry of the term of duration, without special formalities. In other cases, the dissolution will occur after the date of registration of private document or the enforcement concerning the act containing the decision of competent authority.

Article 39. Enervation of the grounds for dissolution.

- You can avoid the dissolution of society by taking measures as may be appropriate, as the causal occurred, provided that the enervation of the cause occurs during the six months following the date on which the Assembly recognized the resignation. However, this period is eighteen months in the case of the grounds provided for in paragraph 6 of the preceding article.

Article 40. Clearance.

- The liquidation of assets is conducted according to the procedure outlined for the liquidation of limited liability companies. Act as the liquidator's legal representative or the person appointed by the shareholders.

During the period of liquidation, shareholders will be invited to the general assembly of shareholders on the terms and conditions provided in the statutes and the law. The shareholders shall make all decisions that pertain to the general assembly of shareholders, the quorum and majority decision-making occur in force before the dissolution.

FINDINGS RELATED TO THE CONSTITUTION OF THE COMPANY

1. Legal Representation .- The constituents of the company shareholders have designated in this act of incorporation, to (insert name of legal representative), identified with the ID No. (____________), as legal representative of (INSERT NAME) SAS, for a period of 1 year.

(INCLUDE NAME OF LEGAL REPRESENTATIVE) participates in this act in establishing a view to reflecting on his acceptance of office for which appointed, and to show that there are no incompatibilities or restrictions that may affect your appointment as legal representative (INSERT NAME) SAS.

2. Acts performed on behalf of the company being formed .- From the registration of this document in the Register, XXX SAS assumes all rights and obligations of the following acts and legal acts, carried out for the society during its formation process:

(LIST OF EVENTS AND INCLUDE RELEVANT CONTRACTS)

Legal personification of society .- After the registration of this document in the Register, XXX SAS form a separate legal entity from its shareholders, as provided in Article 2 of Law 1258 of 2008.

ANNEX 2.

MODEL CONTRACT statutory audit
COMPANY
NIT 000000000-0
Address

PROFESSIONAL SERVICES CONTRACT FOR FISCAL AuditorNAME OF CONTRACTORADDRESS OF CONTRACTORNAME OF CONTRACTORCONTRACTOR'S ADDRESS

OBJECT Providing Professional Service Tax Auditing
PLACE

Among the subscribers to know ,______________________, of age, identified with citizen identification number __________ to _____________, who, as of _____________________ and Nit ______, representing _____________________________________, legal person, duly authorized for the purpose as stated in the certificate of existence and legal representation who henceforth and for the purposes of this contract will be called ___________________ and, secondly, ____________________, identified with the identity card of ___________, No_________________ who works in his capacity as __________________________ acting on behalf of commercial ______________________________sociedad society constituted by __________________, and registered at the Chamber of Commerce of the _____________________________ _________________ _________________ under number ______, Book Nit________________ identified with, all of which appear on the certificate of existence and legal representation issued by the Chamber of Commerce _____________el____________, party for the purposes of this contract is called THE CONTRACTOR, have agreed to enter into this contract for the provision of professional services of statutory audit, the following preliminary considerations: _____________________________________. According to the foregoing, the parties enter into this contract with the following clauses: FIRST .- PURPOSE: THE CONTRACTOR _______________ is committed towards providing professional services to statutory audit and in that sense, to advance the process of auditing and financial analysis, accounting and administration on the activities of ____________, in order to verify compliance with all legal rules that apply, including those arising out of its nature ___________________de institution as provided in the existing rules on statutory audit. Likewise, it should audit the proper management of resources ________________. All of the above, under and in accordance with the bid submitted by the CONTRACTOR ____________________. SECOND.- VALUE OF CONTRACT: For all legal and tax purposes, the value of this contract is for the sum of PESOS MCTE __________. ($_____________), Amount includes VAT. THIRD .- PAYMENT: The total amount indicated above shall be canceled by the ________________________________________-in monthly installments due during the time that is in effect the appointment of the contractor as Auditor and, in any case, after the signing of the Act of Start, pre-registration with the Trade at least the Principal Auditor. The above amounts include VAT. FIRST PARAGRAPH: CONDITIONS FOR PAYMENT: ________________ agrees to make payment of the values ​​set out in this clause within fifteen (15) days following the filing of the bill by the CONTRACTOR, provided that it has complied with the purpose and obligations under this contract in accordance with the certificate of compliance issued to the effect's supervisor. FIFTH .- IMPLEMENTATION AND EFFECTIVE DATES: The period of performance of this contract shall be ___________________ starting from the day of the signing of the Act of Start. The term of the contract ______________________, counted from the conclusion of the agreement. PARAGRAPH. Notwithstanding the stipulation of the deadlines and effective, the CONTRACTOR acknowledges and accepts that they do not give right to stay until their completion, because in accordance with the provisions of Article 206 of the Commercial Code the auditor, understanding to this effect as the contract, may be removed at any time, in which case it is understood that the contract is only the formalization of the relationship established from the description, completed in advance, without any compensation . SIXTH .- OBLIGATIONS OF CONTRACTOR: The Contractor agrees to comply with the contract in accordance with the nature and legal status of the statutory audit, the proposal, taking into account inter alia the following responsibilities: a) oversee all operations and acts of ________________________________________-, by Statutory what the coverage will, permanence, independence of action and criteria, preventive role. b) Undertake a review of financial information del________________________________________a to express an independent professional opinion on the financial statements and the assessment and monitoring of control systems, taking into account both the objectives that the law has been identified as shown in the Technical Council Public Accountants. c) Carry out a comprehensive, ongoing audit to determine whether, in the opinion of the reviewer, ________________________________________, financial statements are presented in accordance with accounting standards generally accepted. d) Check whether the ________________________________________ "has complied with the laws that apply in the development of its operations. e) Evaluate the internal control system to conceptualize about the appropriateness of it. f) Provide public faith with his signature, which will assume that the respective act complies with the legal and statutory requirements. g) Implement appropriate controls that allow al________________________________________dar strict compliance with the regulations and instructions that apply, according to its legal regime for the prevention of money laundering and terrorist financing, management, including examination of the functions meeting the managers of the entity under the relevant regulation. h) Prepare and submit the following reports: i) Report on the operations and transactions of ________________________________________-; ii) Report on the efficiency and timeliness in handling resources ________________________________________-; iii) Evaluation Report of the technical management of the portfolio investment, including recommendations that may be required; iv) Report on the correct management and allocation of funds i) Submit reports as requested by the control and supervisory agencies. j) Comply with the provisions of Article 207 of the Commercial Code and Title One, Chapter Three, as well as other standards governing the exercise of the functions of auditor. k) Submit to ________________________________________, within fifteen (15) days following the commencement of the contract, a plan, with its own schedule of activities will be advanced. l) To execute the contract with the team submitted its proposal, except with the prior written ________________________________________a through the Supervisor of the contract. ll) ________________________________________la Make available to all necessary and appropriate tools for effect, without the ________________________________________suministre any tool or resource (technical, administrative, financial or human) for such purposes, subject to space and staffing for the same under Terms of Reference of the invitation. m) The Contractor warrants that saved _______________________________________ reservation on all information that is accessible under the contractual relationship that is built with the ________________________________________. n) In accordance with Article 50 of Act 789 of 2002, as amended by articles 1 and 9 of Act 828 of 2003, the contract must prove, by a certificate signed by the Auditor, the obligations meet the payment of contributions to health systems, pensions and occupational hazards and contributions to family compensation funds, the Colombian Institute of Family Welfare and National Apprenticeship Service, and o) Other duties as may be necessary, inherent and relevant to the compliance under this contract, according to its nature and in accordance with the rules and instructions of the Superintendencia Financiera de Colombia. SEVENTH .- OBLIGATIONSEL________________________________________se ____________: agrees to contract: a) pay the amounts stipulated in the manner prescribed in the second and third clauses of this contract. b) To provide all data, reports and documents related to accounting and financial statements of the entity so that made the Statutory CONTRACTOR, c) allow the effective implementation of audit procedures necessary to obtain and document evidence valid and sufficient information on each of the matters subject to audit by the CONTRACTOR; d) To prepare any documents on events, transactions or data from THE ________________________________________que the auditor must certify, rule or refer to others, except that the document be exclusively the actual activity of tax inspection of the CONTRACTOR. e) To exercise the respective control in the execution of the contract. f) To provide sufficient space for _____ workstations, equipped with telephone, desk and file, excluding computers and stationery. g) issuing timely completion certificate of service. EIGHTH .- SUPERVISOR CONTRACT: Act as supervisor of this contract the ___________ of ________________________________________, or his substitute. NINTH .- WARRANTY: As a condition to start execution of the contract, the CONTRACTOR shall be in favor of ________________________________________-, in an insurance company legally established and licensed to operate in Colombia, within three (3) business days following the signing of this contract , a unique warranty that covers the following risks: a) compliance, to endorse the observance of all obligations herein agreed, the amount shall be equivalent to twenty percent (20%) of the total contract value and duration is _______ months from the date of signing the contract. CONTRACTOR agrees to extend or prolong, in the above terms, the guarantee in the event that an extension of the execution and / or validity of the contract or be affected by disasters, b) quality of the service, in an amount equivalent to thirty percent (30%) of the total value of the contract, which will be valid for _______________ after the date of signing the contract. CONTRACTOR agrees to increase or extend, in the above terms, the guarantee in the event that an extension of the execution and / or validity of the contract or be affected by claims, and c) PAYMENT OF WAGES, BENEFITS AND ALLOWANCES, in amount equivalent to ten percent (10%) of the total contract value, which shall be ____________________, starting from the signing of the contract. CONTRACTOR agrees to increase or extend, in the above terms, the guarantee in the event that an extension of the execution and / or validity of the contract or be affected by disasters. TENTH .- CRIMINAL FINES CLAUSE: The Contractor shall pay to THE ________________________________________por total failure twenty percent (20%) of the total value of this contract, as an early estimate of damage, which will be paid by the policy covering the risk of breach of contract or by any other legal means. The foregoing is without prejudice to the increased compensation that may be required by reason of such breach. In case of partial failure or delay in fulfilling the obligations of the CONTRACTOR, shall pay to THE ________________________________________multas successive amount equivalent to one percent (1%) of the total contract value for each day of default or failure to comply fully, without they exceed ten percent (10%) of the total contract value, which may be deducted from what is owed to the CONTRACTOR, or making effective the policy covering the risk of default, or charged by any other legal means. ELEVENTH .- BAN TO YIELD THE CONTRACT: The Contractor shall not assign this contract to any person or entity without the express prior written consent from ________________________________________. TWELFTH .- disabilities and incompatibilities: The Contractor declares under oath that he is not involved in any of the disqualifications and incompatibilities in the Constitution and the law in case of a disability or incompatibility occur at the time of concluding the contract did not exist, terminate ________________________________________podrá the contract unilaterally without generating or compensatory actions for damages for the contract against ________________________________________THIRTEEN. TERMINATION: In addition to the provisions of paragraph of Clause Four, THE ________________________________________-may unilaterally terminate the contract where any of the following reasons: a) dissolution, abolition, merger, transformation, dissolution of the entity that holds the quality FLC, b) not constitute CONTRACTOR warranty required under this contract or not to extend his term if required, c) Breach of any of the obligations of CONTRACTOR that in the opinion of ________________________________________afecte the proper execution of the contract and its merits termination, d) When the ________________________________________lo deems appropriate, with notice that it will provide the Contractor with a notice of not less than fifteen (15) business days, e) show or incurred by the CONTRACTOR or incompatibility, disabilities, as provided in clause eleven of this contract, f) When the termination is the result of a judicial decision, and g) By mutual agreement of the parties. In all these cases ________________________________________-only pay the amount that is outstanding at the date of termination, and there will be no payment of compensation or any additional sum to the contractor. FOURTEENTH .- CONFLICT RESOLUTION: To resolve conflicts that may arise as a result or in connection with this contract the parties may apply to the direct settlement of disputes or, if deemed appropriate, mechanisms for conciliation or amicable. FIFTEEN .- SUBJECT TO THE LAW: The parties shall be governed by the provisions of this document, and in matters not provided be subject to the rules applicable to such  contracts. .- SIXTEENTH OF THE CONTRACT DOCUMENTSThese constitute an integral part of this contract the contractor's proposal and the invitation to contribute, as well as all communications to be sent between the parties to the contract, if not contrary to the agreements of this document. SEVENTEEN .- TAXES: _______________como Act as a retainer provided for in Article 518 of the Tax Code. EIGHTEENTH .- LACK OF LABOR RELATIONS: The execution of this agreement does not create or imply the existence of an employment relationship between EL-and ________________________________________ CONTRACTOR or their dependents, with the right one only to the payment of compensation expressly agreed. NINETEENTH .- LIQUIDATION: The bilateral settlement of this contract will be within _____________ months following the expiration of the contract. In the event that CONTRACTOR fails to appear at the settlement of the contract or there is no agreement on it, THE ________________________________________liquidará unilaterally the contract within two (2) months following the closing date for bilateral settlement. ADVANCED TWENTIETH .-: This contract is considered perfected as of the conclusion of the agreement by the parties and their execution is required prior acceptance of a guarantee that this Clause Eight, as well as the principal auditor registration in the Chamber of Commerce .

In witness signed this contract on the _______________en _______________., two copies of the same wording and content, bound to each of the parties.

THE

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CONTRACTOR

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