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Simplified Stock Corporation - October 2014

Draft OAS Model Law on the Simplified Stock Corporation (SAS) considered at Annual Meeting of ASORLAC

The Department of International Law (DIL) was invited to attend the Annual Meeting of the Association of Latin American and Caribbean Registrars (ASORLAC) which was held on September 29 and 30th, 2014 at the Bogota Chamber of Commerce in Colombia. The main topic was “A Model Law for the Simplied Stock Corporation (SAS).” A presentation was made by DIL on the progress of the draft Model Law at the OAS and its status; the draft is currently before the Committee on Juridical and Political Affairs (CAJP) and has been scheduled to be considered by the CAJP on December 4th.

Annual Meeting of the Association of Latin American and Caribbean Registrars (ASORLAC)
Kristtian Rada, Regional Manager of Business Regulation for Latin America and the Caribbean,
IFC World Bank Group

ASORLAC is a relatively new non-profit association with its membership comprised of the registry offices of several Latin America and Caribbean states; it has as its vision “the promotion of best practices in the public registry administration.” Members include the registries of Colombia, Mexico, Brazil, Suriname, Peru, Paraguay, and Dominica among others (see

At this year’s meeting, presentations were made by registries from several of these countries on current practices and advances in the simplification of incorporation and registration of a business, and by the International Finance Corporation (IFC), the Registry Office of Spain and DIL, as noted above.

A highlight of the event was a presentation made by Dr. Francisco Reyes Villamizar (recently re-appointed Superintendent of Companies in Colombia), who was the impetus behind Colombian Law 1258, the law that was the inspiration for the draft OAS Model Law. Dr. Reyes described the changes that have occurred in Colombia since the law was enacted in 2008. In brief, this law has reduced incorporation to a simple filing, has streamlined costs and formalistic requirements, and introduced flexibility and contractual freedom. As a consequence, the “SAS” has essentially displaced other traditional business forms as over 95% of new incorporations in Colombia now correspond to the SAS. This has “changed the manner in which people do business in Colombia;” it has brought thousands of businesses previously operating in the informal sector into the regularized formal sector, thereby enabling local and national government entities to significantly increase the tax revenue base and social security contributions; accounting, legal and managerial services have flourished; and reductions in unemployment may also be partially attributable.

Dr. Reyes had presented these results to the Inter-American Juridical Committee (CJI) in 2011 and had recommended that similar legislation be made available to other Latin American countries. After studying the matter, the CJI agreed and approved a resolution on “Project for a Model Act on Simplifed Stock Corporations” (CJI/RES.188 (LXXX-0/12) which was transmitted to the CAJP.

Dr. Reyes and Dr. David Stewart, the CJI rapporteur for the topic, will make a presentation on the Simplified Stock Corporation before the CAJP on December 4th.

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