The small young company

The purpose of the law is to promote the generation of employment for young people between 18 and 28 years of age, thus laying the institutional foundations for the design and implementation of employment policies, entrepreneurship and the creation of new "Small Young Companies".

According to this law, a Small Young Enterprise is understood as one formed by natural or legal persons that meet the conditions defined in the first paragraph of Article 2 of Law 1429 of 2010 (i.e., having a staff of no more than 50 workers and total assets not exceeding 5,000 SMMLV). 

Natural persons up to 35 years of age and legal entities that have as partners or shareholders one or more young people under 35 years of age representing at least half plus one of the quotas, shares or participations in which the capital of the company is divided, will be entitled to the benefits established therein.  It will be understood that the beginning of the main economic activity of the Small Young Enterprises is the date of registration in the commercial registry of the corresponding Chamber of Commerce, regardless of whether the corresponding enterprise has previously operated as an informal enterprise.

The Small Young Enterprises that start their main economic activity as from the enactment of this law will be exempted from the payment of the commercial registration and its renewal during the first year following the start of the main economic activity. Likewise, in the event that new personnel is hired who at the time of the beginning of the employment contract are between 18 and 28 years old, the employer will not have to pay, during the first year of employment, the contributions to Family Compensation Funds for such workers.

In order to have access to the above mentioned benefit, the employer must increase the number of employees in relation to those on the payroll of the previous year, as well as increase the total value of the same compared to the value of the immediately preceding year.

This benefit will only apply to new personnel, not including those coming from the merger of companies, nor persons under 28 years of age hired to replace the old personnel.

The present law establishes the grounds for conservation and loss of benefits, which are substantially the same as those established to maintain the benefits conceived by Law 1429 of 2010. 

Finally, nothing prevents the new companies to be incorporated from having the double quality of beneficiaries of the prerogatives established in law 1429 of 2010 and in law 1780 of 2016, thus being able to coexist both regimes in the new company to be incorporated.