Category: News

The Colombian Congress approved a bill that seeks to reduce the work-week from forty-eight (48) to forty-two (42) weekly hours, and the bill is now waiting for presidential approval.  The reduction in hours is meant to be gradual. During the first two (2) years after the law comes into force, there will be no reduction. The reduction will start in 2023 and until 2024 will decrease one (1) hour each year. After that, from 2025 until 2026, the work-week will be reduced by two (2) hours each year. The goal is that by 2027 the work-week will be forty-two (42) hours.

This reduction would not entail a wage reduction for workers. Likewise, it would not affect any rights or guarantees acquired by the workers with their employer. However, this project seeks to exonerate employers from the application of two concrete norms:

(i) Article 3 of Law 1857 of 2017, which refers to the possibility for employers and employees to agree to a flexible schedule or flexible working conditions so that employees can fulfil their duties of protection and accompaniment of their family.

(ii) Article 21 of Law 50 of 1990, which refers to the obligation of employers who have fifty (50) or more employees to dedicate two (2) weekly hours from the work-week to sports, cultural activities, or professional training.

There have been several initiatives to reduce the working schedule around the world that have had good results, proving that productivity can be maintained or even boosted. However, certain economic sectors are opposed to the bill because they considered that the work-week reduction alone does not entail an improvement. Those opposed to this bill have stated that to increase productivity of a company there needs to be: a reduction of time on internal processes, automatization of processes and an increase in training of employees, however, these strategies are not included in the bill.

The lack of these strategies, along with the decrease in the work-week, has generated a concern that there will be an overload for certain workers due to their inability of completing the workload in a forty-two (42) hour work-week, which will need to be completed later by the most diligent employees.

What do you think about this bill? BéndiksenLaw can help you solved any doubts on its implementation.

The Colombian government issued Decree 580 of 2021 which extended the “selective isolation” measures until September 1. However, the Decree seeks that mayors and governors establish measures that encourage a safe economic reactivation during the pandemic, allowing a gradual recovery for the business sector.

Decree 580 also seeks that when closure of economic activity is being considered by mayors due to an increase in COVID-19 cases, a favorable concept from the Health Ministry and the approval of the Interior Ministry will be required. This measure aims to prevent untimely closures of business activities, and harm to the economic sector.

With the moderation in closures and limitations of economic activities the government aims to stimulate business recovery, however, these measures are not enough on their own to foment reactivation to 100%. That is why the government has proposed additional measures like: (i) guaranteed credit lines, (ii) postponement of tax obligations, and (iii) strategies to encourage investment. These benefits will be available to all companies, but specially to micro and small companies due to the financial complications that these types of businesses have experienced during the pandemic.

Regarding credit lines, the Ministry of Commerce along with Bancoldex are looking to implement three credit line programs whose sum would be up to 700 billion COP. This sum will be split into: 200 billion COP directed to reinforce small and micro companies credit lines, 100 billion COP to support micro companies, entrepreneurs, and independent workers for investment, and 400 billion that will be focused on the rediscount line for all companies that have acquired debt due to the pandemic.

The National System of Agricultural Credit will have 15 billion COP available for investment or portfolio normalization. Likewise, the National Fund of Guarantees is setting up guaranteed credit lines, through its program “United for Colombia”, to micro financial companies and independent workers who are already part of their program.

Other support measures consist of: (i) the delay of the income tax fee of 2020 for small and micro companies, the first fee will be delayed by two months and the second fee will be delayed by five months from its original due date, (ii) the tax rate for advanced payment  for  taxable year 2021 is set at 0%, (iii) the “Reactivatech” initiative which seeks to reinforce businesses, knowledge, and digital tools for entrepreneurs and, (iv) strategies of remission of current and moratorium interests, to bring relief to debtors.

If you wish to know how to apply to any of these incentives or strategies of economic reactivation, BéndiksenLaw can guide you.

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The national tax authority (DIAN) launched its electronic notice system for administrative acts beginning on May 8 of this year. This type of notice will be used by the entity for tax, customs and exchange matters.

The electronic notice aims to provide clear knowledge to companies and individuals about particular and specific administrative acts issued by the DIAN, to guarantee taxpayers their right of defense and to counter evidence. The administrative acts will be sent to the last email address registered by the recipient in their Unique Tax Record (RUT).

For legal purposes, this notification will be considered to be delivered on the same date the administrative act was sent to the email. However, the legal terms to respond to or challenge the administrative act will be calculated starting five days after the delivery of the notice by email.

The notice that will be sent with the administrative act must include certain requirements. These are: (i) the verification code, (ii) full name or company name, (iii) NIT (Tax ID Number), (iv) date of issuance of the message (v) specification of electronic means to view the administrative act and its content, (vi) the complete administrative act, (vii) the remedies that can be initiated against the act and before which authorities it must be filed and (viii) the deadlines to do so.

If you want to know more about electronic notices, BéndiksenLaw can give you detailed information about it.

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The economic landscape in Colombia has seen better days. This is especially true regarding micro and small companies from Colombia that lack the financial muscle to face the challenges derived from the preventive measures taken by local governments against the pandemic.

Many of these companies have faced abbreviated reorganization or simplified liquidation processes, which were created by Decree 722 of 2020 for companies that have equity equal to or below 5.000 monthly minimum legal wages. The increase in these types of processes has generated an additional burden on the judicial system.

Therefore, the Superintendence of Corporations has added new functionalities to their insolvency module, “MI” for its initials in Spanish. The MI is a virtual tool with artificial intelligence that helps in the managing of insolvency processes in a more agile and efficient way. Previously, the MI only accepted applications for the admission of emergency reorganization agreements. Now, it will be possible for users of the program to request the admission of simplified liquidation and abbreviated reorganization processes, in a simple way.

The Superintendent, Juan Pablo Liévano, explained that abbreviated reorganizations and simplified liquidation processes are designed to help the economic recovery and to effectively address the needs of small and micro companies. Therefore, IM is intended to be a very user-friendly platform.

BéndiksenLaw can counsel you, in both abbreviated reorganization and simplified liquidation processes as financial recovery tools.

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The difficult economic situation generated by the restrictions and closures of commercial establishments due to the COVID-19 pandemic has generated an increase in offers and promotions that are being advertised by companies as a commercial strategy to encourage consumers to buy their products and to build a bigger client base. Offers and promotions are a useful strategy, however, they are carefully monitored by the Superintendence of Industry and Commerce to guarantee that no consumer rights are being infringed or disregarded. For this reason, merchants and companies need to keep in mind certain requirements.

The Consumer Rights Law (Law 480 of 2011) on its article 5, num 10 states that an offer consists of the provisional offering, done by a merchant or company, of products that have more favorable conditions than the “standard” version of the product for free or at the same price point as the usual product. On the other hand, promotions are considered as the offering done by a merchant or company, of products that have extra content for free, for a reduced price, or products on the “standard” version that is offered for a discounted price. Also, the incentives for consumers such as raffles or contests fall under this category.

All commercial strategies or events that are carried out by a brand or a company that fall into the categories of offers or promotions need to follow certain parameters to avoid any infraction of consumer rights. According to the Superintendence, promotions and offers need to contain at least the following information:

• Full identification of the product, service or benefit that is being offered.
• Conditions of time, place, and manner to access the benefit.
• Terms and conditions for its delivery.
• Time frame of the promotion or offer.

It’s important that each of these points is strategically included on the publicity campaign to avoid any sanctions imposed by the SIC for inducing consumers to error. The inclusion of these elements is also important to avoid any inconvenience with consumers that could result in a reputational (goodwill) damage to the company

If the beginning date of the offer or promotion is omitted in the advert, it will be understood to start from the moment that it became known to the public. This means that the offer will be binding from that moment, even if the promoter is not ready for the beginning of the promotion or offer.

When the duration of the promotion is not stated in the advert, it will be in force until its revocation is made known to the public. In this case, it is necessary that the company announces the revocation using the same type of media and intensity that was used for the original campaign. This omission can generate an additional expense in publicity to announce the revocation. Additionally, it could lead to fines if the SIC considers that the type of media and the intensity were not the same between the two adverts.

Lastly regarding raffles and contests, it is important to note that if they are determined by chance, they fall under the category of promotional games, which is a category of games of chance. These promotional games have special regulations and are supervised by Coljuegos.

BéndiksenLaw can counsel you with the legal planning of your publicity campaigns to avoid sanctions.

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The national tax authority (DIAN) established the use of the new electronic signature through Resolution 080 of July 28, 2020. The advantages compared to its predecessor are; it is easy to obtain, its simplicity of use and it facilitates the fulfillment of obligations and administration of procedures before the entity. The best thing is that it can be done without leaving your home, through an online self-generation process. This is ideal due to the public health emergency generated by COVID-19.

The administration points out that the previous electronic signature will cease to be valid as of June 1, 2021. For this reason, the DIAN has committed itself to accompany users, through messages in digital media and direct communications, in the process of changing their electronic signature. However, it has noticed that there are still a large number of users who have not made the migration to the new electronic signature.

This electronic signature will be valid for 3 years with the intent that users will be able to fulfill their tax obligations in an easier and more agile way. Another novelty is that the electronic signature established in Resolution 080 is not solely for those individuals legally mandated to have an electronic signature but for the general public. Those who do not make this change before June 1 and need to carry out a procedure, they will be guided by the system to obtain their new signature, thus avoiding delays in transactions.

The tax authority also clarifies that if the user’s electronic signature was obtained before the publication of Resolution 080, it must be changed to the new one. If the electronic signature update procedure has already been carried out, in accordance with  Resolution 080, or if the signature is obtained after June 1, no additional procedures are required.

If you need help generating this new electronic signature, BéndiksenLaw can advise you in the process.

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Colombia regulated telework with Law 1221 of 2008. However, the law started to increase in relevance a year ago due to social distancing measures imposed due to the COVID-19 pandemic. This newfound popularity, along whit its current use, led to a debate before the Colombian Constitutional Court of the constitutionality of its Article 6. The Court rendered its decision on this matter on April 21, 2021.

The Article, for the most part, was declared constitutional except for an expression enshrined in the last section of the article. The text classified as unconstitutional by the Court limited the payment of overtime and night hours of teleworkers to those who performed their duties in a place where the work could be verified. This regulation imposes an extra burden on teleworkers, since telework is mostly or fully executed outside the physical space determined by the employer.

Law 1221 seeks to promote equality between teleworkers and workers. According to this principle, the Constitutional Court declared the previously mentioned expression as unconstitutional because this regulation created inequality between regular workers and teleworkers. The condition that work must be executed somewhere where it can be verified was deemed excessive, taking into consideration the existence of technological tools for time keeping that do not require the mobilization or on-site vigilance of the teleworker. The overtime could also be verified trough the correct and timely execution of duties imposed by the employer.

This decision opens the door for the adequate remuneration of overtime, night hours, and holiday hours of teleworkers without the requirement of on-site verification and in harmony with current labor regulations.

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Under Colombian corporate law, there is a situation of corporate control when the decision-making power of a company is subject to decisions by another individual or company. Article 621 of the Colombian Commercial Code establishes three specific cases where there is seemingly a situation of corporate control which trigger the legal duty to register, not only the situation of corporate control itself, but also details of the controlling company or individual such as: name, nationality, economic activities, and the occurrences that resulted in a corporate control situation.

This obligation is not new, however the Superintendence of Corporations issued its External Letter 2021-01-099823 in which it reminds companies of their duty to report corporate control situations or the emergence of  corporate groups, arguing that the two main factors for incompliance with this obligations are the public’s unfamiliarity with it along with its  erroneous interpretation.

Due to this, the Superintendence wishes for this External Letter to be an educational tool, promoting knowledge about these regulations and exhorting the public to comply with this legal obligation. It also reminded the public that the Superintendence of Corporations can impose fines of up to 200 monthly minimum wages for each omission or for each item erroneously registered.

The External Letter contains a chapter on alternative sanctions that consists of attending courses taught by the Superintendence. The length of the course will depend on the severity of the sanction.

If the Superintendence starts an investigation and the company in question wants a reduction of the fine, it will be necessary to accept the charges and comply with the registration or rectification of the information that is requested by the Superintendence of Corporations.

Avoid a possible penalty! BéndiksenLaw can counsel your company regarding registration of corporate control situations or corporate groups.

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Law 2069 of 2020 – “Law of Entrepreneurship”, brought a major change to the grounds for dissolution due to financial losses that was established for companies based on Article 457 of the Colombian Code of Commerce. This rule has now disappeared in favor of a new concept regulating when a company is considered to be in a ground for dissolution.

The grounds for dissolution for “not complying with the hypothesis of undergoing business” is replacing the grounds for dissolution of financial losses that reduced a company’s equity that was established in the Colombian Code of Commerce. Therefore, a company may have severe financial losses that reduce its equity below 50% of its paid-in capital and not be considered to be in a ground for dissolution, since now the hypothesis of undergoing business prefers subjective and investigative criteria over the objective criterion that was previously established in Article 457.

Under Article 4 of Law 2069 of 2020 a company could undergo a dissolution when, in the foreseeable future, its financial statements reveal facts or conditions that can generate doubt about the continuity of business. Some of these facts could be: (i) high probability of events that risk liquidity, (ii) loss of important clients or suppliers, (iii) identification of obsolescence of products or business models.

If you wish to receive legal counsel for your company regarding the new regulations of Law 2069 of 2020, BéndiksenLaw can provide guidance and counsel in this matter.

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Personal data are economic assets that are bound to people’s personal sphere, which is the reason why they are protected under national and international legislations. In Colombia, companies that collect and use personal data need to do so under certain guarantees enshrined in Law 1581 of 2012. Among these guarantees are the duty of data protection to prevent leakage or use by an un-authorized third party.

The Superintendence of Industries and Corporations conducted its second annual study on the security measures of companies that registered their databases in the National Registry of Databases. It found that of 33.596 companies in the registry, 24.424 do not have the necessary security standards to comply with the legal responsibility of protecting personal data.

This finding constitutes a huge risk for the companies that are not complying with the legal obligation of ensuring the security of gathered personal data. This non-compliance could not only mean legal sanctions but also reputational detriments for the companies, even if there has not been any leakage or threat to the data.

If you wish to know how to protect your company from these risks and build an effective plan to guarantee the safe handling of personal data, BéndiksenLaw is here to help you.

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