Is your company required to have a Statutory Auditor by 2024?

Which are the companies that must have a Statutory Auditor in the year 2024?

In accordance with Article 203 of the Code of Commerce, all joint stock companies, branches of foreign companies and companies in which, by law or by the bylaws, the administration does not correspond to all the partners, when so provided by any number of partners excluded from the administration representing not less than twenty percent of the capital, must have a Statutory Auditor regardless of the amount of their income or assets, except for:

 Simple Corporations (S.A.S.), since they are regulated by Law 1258 of 2008, in its article 28 and article 1 of Decree 2020 of 2009, which establish that S.A.S. companies will have a Statutory Auditor in the cases considered in paragraph 2 of article 13 of Law 43 of 1990 and when a special law so provides, for example, for providing health services and being supervised by the Superintendence of Health.

Limited Liability Companies (LTDA), are not required to have a statutory auditor according to Article 203 of the Code of Commerce because their capital is not composed of shares but of quotas.

Companies that are not joint stock companies must have a statutory auditor if as of December 31, 2023 they have assets equal to or greater than 5,000 SMMLV or revenues equal to or greater than 3,000 SMMLV. To make this calculation, the minimum salary value of the previous year must be taken, i.e., $1,160,000. for which the ceilings for the year 2024 would be (figures expressed in Colombian pesos):

• Assets: $ 5.800.000.000.
• Income: $ 3.480.000.000.

Therefore, any type of company, including S.A.S. and Limited Companies, with amounts equal to or higher than those mentioned above, must have a statutory auditor in the year 2024. Additionally, it must be taken into consideration that these ceilings for Assets and Income will vary each year, since they are ceilings established in SMMLV.

Based on the above, we take the text of Law 43 of 1990 in the second paragraph of Article 13, which reads as follows:

«It will be mandatory to have a Statutory Auditor in all commercial companies, of any nature, whose gross assets as of December 31 of the immediately preceding year are or exceed the equivalent of five thousand minimum wages and/or whose gross income during the immediately preceding year is or exceeds the equivalent of three thousand minimum wage».

What are the other entities required to have a Statutory Auditor?

In addition to the companies and conditions mentioned above, there are other entities or legal entities that are required to have a statutory auditor, each one regulated by its own regulation. These are listed below:

• Cooperative and Non-Profit Entities: Article 38 of Law 78 of 1998 establishes that all Cooperative Entities mentioned therein must have a statutory auditor.

• Employees' Fund: In accordance with Article 41 of Decree 1481 of 1989.

• Health care entities: All entities that provide health services and are supervised by the National Superintendence of Health are required to have a Statutory Auditor, in accordance with Article 228 of Law 100, among other regulations.

• Obligated financial entities: In accordance with Article 79 of the Organic Financial Statute and Article 20 of Law 45 of 1990. In other words, all companies that are supervised by the Financial Superintendency must have a Statutory Auditor.

• Commercial or mixed-use developments: In accordance with the provisions of Article 56 of Law 675 of 2001.

• Non-profit entities such as: The foundations or institutions of common utility indicated by Article 3 of Decree 1529.

• Family compensation funds: in accordance with the provisions of Article 48 of Law 21 of 1982.

• Livestock farmers' funds: in accordance with Article 16 of Law 363 of 1997.

What happens if I am obliged to have a Statutory Auditor and I do not appoint one?

1. Non-compliance with Article 203 of the Code of Commerce.
2. Non-compliance with Article 13 of Law 43 of 1990.
3. Financial Statements presented without the provisions of Article 42 of Law 222 of 1995.
4. The tax returns will be considered as not filed and therefore the companies or entities will be subject to penalties, in accordance with article 580, paragraph d) of the Tax Statute.

 What are the steps to appoint the Statutory Auditor?

The following are the general steps that can be taken for the appointment of a Statutory Auditor.

Each company or entity is regulated by its bylaws or internal rules, where the conditions to be obliged to have a Statutory Auditor must be contemplated. The Statutory Auditor must be appointed by the highest body of the company, for example, Shareholders and partners, where his fees and the period for which he will be appointed will be determined, unless this period is already determined by the Bylaws. Said appointment and conditions must be recorded in minutes, which must be filed with the chamber of commerce where the company's domicile is registered. This is necessary so that the Certificate of Existence and Legal Representation is recorded in the Certificate of Existence and Legal Representation and, subsequently, must be updated in the Single Tax Registry.

Finally, we invite you to evaluate the above mentioned and if you need additional advice or require a Statutory Auditor for your company, do not hesitate to contact us, as we have this service and others.