Superintendence of Companies fines COOSALUD COP $150 million

This decision underscores the importance of timely declaring and registering control and subordination relationships before the relevant Chamber of Commerce, in accordance with the Colombian corporate law framework.

What is meant by a situation of control?

In accordance with Articles 260 and 261 of the Commercial Code, subordination exists when a company is subject to the decision-making power of another, known as the parent or controlling company, thereby giving rise to a situation of control over one or more subsidiaries.

The law presumes the existence of subordination when any of the following circumstances occur:

1.     The parent company holds more than 50% of the subsidiary’s capital.

2.     The parent company and its subsidiaries, jointly or separately, hold the majority of voting rights at the shareholders’ meeting or partners’ assembly.

3.     The parent company exercises a dominant influence over the decisions of the management bodies.

Additionally, joint control may exist when several natural or legal persons act in a coordinated manner to direct a company.

What is the applicable legal obligation?

In accordance with Article 30 of Law 222 of 1995, any natural or legal person who exercises control must register the situation of control in the corresponding commercial registry for each of the related parties within thirty (30) days following the date on which such control is established.

Failure to comply, omission, or incomplete registration may result in sanctions of up to two hundred (200) current monthly legal minimum wages, as occurred in the case analyzed.

Why is it important to register the situation of control?

Registering the situation of control is not only a legal obligation; it also generates key benefits for the company, such as:

1.     Transparency vis-à-vis third parties.

2.     Clarity regarding who effectively exercises decision-making power.

3.     Proper management of conflicts of interest and related-party transactions.

4.     Protection of information of public interest, in line with the criteria of the Superintendence.

5.     Strengthening the implementation of good corporate governance practices.

Implications for companies

This issue is particularly relevant for all companies, as in practice it is common for situations of control to arise without being timely identified and registered before the competent authority.

Failure to register may result in:

1.     Significant financial penalties.

2.     Administrative investigations.

3.     Reputational risks.

4.     Weakening of corporate governance.

Can we assist you?

At Forvis Mazars, we have a specialized corporate law team prepared to support the analysis, determination, and registration of situations of control, as well as comprehensive compliance with the associated legal obligations.