Understanding De Facto Commercial Partnerships in Colombia: 5 Key Points
Are you considering entering the Colombian market and exploring business opportunities? Understanding the nuances of de facto commercial partnerships can be a pivotal step. Here, we break down the five essential things you need to know:
### How does a de facto commercial partnership operate?
In the context of Colombian business, a de facto commercial partnership is formed through a mutual agreement where parties contribute significant monetary assets with the objective to share the profits derived from the business venture. It operates based on a consensus and a shared vision for the enterprise, without a formal legal structure.
### What is the process for dissolving a de facto partnership?
Dissolving a de facto partnership is relatively straightforward in Colombia. It can be initiated by the explicit desire of a single partner, without the need for a formal agreement from a board or assembly. Moreover, the decision does not have to be documented through a public deed or registered in the commercial registry, simplifying the dissolution process considerably.
### What does "permanent state of dissolution" mean?
This phrase might sound alarming, but it should not be taken literally. While de facto partnerships lack legal personality and do not function as legal entities, the agreements between partners remain effective (as per article 499 of the Colombian Commercial Code). The business can continue its operations as stipulated in the initial agreement (referencing article 503).
### Who are affected by the formation of a de facto partnership?
The formation of such a partnership primarily affects the involved parties or associates. It is a consensual cooperation agreement, where regulatory aspects are agreed upon and are binding among the associates involved.
### Are there specific formalities to adhere to during dissolution and liquidation?
Interestingly, Colombia's legal framework allows for a flexible approach towards the dissolution and liquidation of a de facto partnership. If no formalities were observed during its formation, there are no specific formal requirements to adhere to during its dissolution and liquidation, making the process less cumbersome compared to other types of business structures.
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We hope this guide provides a clear understanding of de facto commercial partnerships in Colombia, aiding English-speaking entrepreneurs in navigating the Colombian business landscape with informed decisions. Remember, while it offers flexibility, understanding the legal nuances is key to successful business operations."
