Legal Forms of Companies in Colombia

Different Types of Companies

In Colombia, there are several legal forms to create a company, each with its own characteristics and benefits. Choosing the right legal form for your company is crucial for long-term success. In this article, we will explore the different legal forms of companies in Colombia and their characteristics.

The choice of the legal form is one of the first steps in the incorporation of a company in Colombia. The legal form defines the legal framework within which the company is constituted and its structure and operation.

Some of the most common legal forms in Colombia are the corporation (S.A.), limited liability company (Ltda.), simplified joint stock company (SAS) and sole proprietorship.

The Public Limited Company (S.A.)

It is a legal form used for companies that seek a more complex structure and have the possibility of issuing shares on the stock exchange.

It is often used for larger companies. In this case, the company is divided into shares that can be bought and sold on the stock market. Although SAs have more complex administrative and tax requirements than SASs, they are a good option for companies seeking to expand and raise capital from outside investors.

The Limited Partnership (Ltda.)

It is a legal form for companies that do not need to issue shares in the market and want to maintain a simpler structure.


Simplified Joint Stock Company (SAS)

It is a legal form used for companies that seek a balance between the simple structure of the Ltda. and the complexity of the S.A.

It is relatively new in Colombia and has become popular for its simplicity and flexibility. Unlike other companies, in the SAS the company’s equity is divided into shares, which allows the owners to limit their liability to the capital they have invested.

In addition, SASs have fewer administrative and tax requirements than other legal forms of companies in Colombia.

The Sole Proprietorship

It is a legal form for companies owned by a single person.

The sole proprietorship in Colombia is a legal form of company in which only one person owns and manages the company. The sole proprietorship is a good option for entrepreneurs who want to have full control over their business but wish to limit their personal liability.

The choice of legal form will depend on the needs and objectives of the company. It is important to consult a lawyer or business advisor to determine the appropriate legal form for the company.

In conclusion, the choice of the appropriate legal form for your company in Colombia will depend on several factors, such as the size of the company, the initial investment and the long-term objectives.

It is important that you consult with an attorney or tax advisor before making a decision. With the right choice, you can have a successful and profitable business in Colombia.