Corporate insolvency: regulatory regime

In addition to the above, Law 1116 of 2006 was complemented with new exceptional and transitory instruments due to the Covid-19 pandemic, under the terms of Legislative Decrees 560 and 772 of 2020, currently in force until December 31, 2023 [2], which have also been subject to regulation by the Executive.

In this order of things, the interpretation of the referred normative compendium must be harmonized with the exercise of the Government's regulatory power [3], whose function, according to the Constitutional Court, is "... the production of an administrative act that makes real the abstract statement of the law.... [in order] to channel it toward effective operativity on the real plane. Such power is embodied in the issuance of the general rules that are necessary for the effective execution of the law" [4].

Having specified the above, as a development of the policy of regulatory simplification promoted by the Superior Council of Economic and Social Policy (Conpes 3816 of 2014), it is important to highlight the so-called unique regulatory decrees, by means of which "the current regulatory provisions are incorporated into a single regulatory body, of competence of the sectors of the national public administration, with the aim of allowing a better knowledge of the law and to have certainty about the validity of the rules, in order to facilitate citizens and authorities the exercise of their rights and the full compliance with their duties" [5].

In this way, in matters of corporate insolvency, most of the regulatory decrees of Law 1116 of 2006 were compiled in Decree 1074 of 2015, "Whereby the Sole Regulatory Decree of the Commerce, Industry and Tourism Sector is issued"; which, in turn, has been added or modified in this matter.

Decrees enacted before to 2015

In accordance with the above, between December 27, 2006, date of enactment of Law 1116, and May 26, 2015, date of issuance of Decree 1074, regulatory decrees of the corporate insolvency regime were issued, currently compiled in the aforementioned unique decree and others, as follows:

Source: Own elaboration. 

Decrees enacted after to 2015

However, after the aforementioned compilation, the corporate insolvency law has continued to be subject to regulation by means of additions or amendments:

Source: Own elaboration.

Decrees issued on the occasion of Covid-19

The regulatory regime continues. Indeed, as noted at the beginning, on the occasion of the Covid-19 pandemic, two states of economic, social and ecological emergency were decreed [6], in response to which two legislative decrees on insolvency proceedings were issued, which in turn were regulated as follows:

Source: Own elaboration.

Superintendence of Companies

It might be thought that the regulatory regime of corporate insolvency ends here, but it does not. The Superintendence of Companies regarding the legal regime of legal auxiliaries, in accordance with the power to issue administrative acts that correspond to him as head of the Superintendency of Companies [7], has issued the following resolutions on the matter:

Currently, the Ministry of Commerce, Industry and Tourism in compliance with the order of Article 2.1.2.1. 14 of Decree 1081 of 2015, as amended by Article 2 of Decree 1273 of 2020, has published draft decree on aspects related to the operation of the auxiliaries of justice within the Corporate Insolvency Regime, stating that "for the full development of its functions, the Superintendence of Companies requires diversifying the profiles of the persons that integrate the List of Auxiliaries of Justice due to the growing number of companies that have been admitted to corporate insolvency processes, The Superintendence of Corporations is aware of the fact that the professionals that integrate the referred list must be apt for the new demands of the market, of the new economic models, in methods of management and business organization, demonstrating their suitability and experience within very high standards of ethics and responsibility, qualities that are required for the performance of the work of liquidator and intervening agent" [8].

As it can be seen and as anticipated, the Colombian corporate insolvency regime is quite broad, which is explained in an active exercise of the regulatory power by the Government, seeking the materialization of the law and the achievement of the collective welfare; not being appropriate to expand, restrict, modify or contradict the rule enacted by the legislator, nor to restrict or prevent the realization of the purposes pursued by it.

Information:

[*] By Carlos Andrés Arcila Salazar. Legal Manager at Mazars Colombia. Lawyer from Universidad Libre, Pereira. Master in business law from Pontificia Universidad Javeriana, Cali; and PhD Candidate in Law at Universidad Externado de Colombia, Bogota, D.C.

[1] Rodríguez Espitia, J. J. (2019). New insolvency regime. Universidad Externado de Colombia.

[2] Law 2277 of 2022, article 96.

[3] Political Constitution of the Republic of Colombia, Article 189, numeral 11.

[4] Constitutional Court, Ruling C-810 of 2014, which includes, among others, Rulings C-805 of 2001 and C-228 of 1993.

[5] https://www.suin-juriscol.gov.co/legislacion/decretosUnicos.html

[6] Political Constitution of the Republic of Colombia, Article 2015. See Decrees 417 of March 17, 2020, and 637 of May 6, 2020.

[7] Decree 1023 of 2012, article 8, numeral 15. This regulatory decree modifying the structure of the Superintendence of Companies was repealed by Decree 1736 of 2020, which, in turn, deals with the same subject matter.

[8] https://www.mincit.gov.co/normatividad/proyectos-de-normatividad/proyectos-de-decreto-2023