The legal reserve is mandatory for certain types of companies and serves to protect the company`s assets and compensate for any losses. The company may cease to absorb resources to build up statutory reserves if there is a legal reform that removes them or if the amount specified in the articles of association is reached. Indeed, in this concept, supersociedades were confronted with the following questions: “Does the simplified joint-stock company have the obligation to have legal reserves? If nothing is provided for in the articles, what would be the rule? “, stated the following: [/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]According to the Companies Act, the simplified joint-stock company (SAS) is not required to recognize the statutory reserve in its articles of association. The law of the chapter that governs the SAS does not explicitly recognize this possibility for this type of company, as is the case for public limited or limited liability companies. Although there may be confusion with the regime introduced for traditional companies by the existing normative reference in the SAS Regulation, it is important to explain that due to the nature of the form of the company, the intention to simplify the procedure and the difference with traditional types in terms of structure, Not all references apply. This alleged confusion is clarified by the fact that the legislator did not explicitly recognize the legal reserve for this type of company. [/vc_column_text] [vc_column_text] To understand this statement, it is necessary to take into account two fundamental elements related to the nature of an SAS: The articles of association may specify the functions that the legal representative will exercise, but if this is not the case, the provisions of Article 26 of Law 1258 apply: “In the articles of association of the simplified joint-stock company, the organic structure of the company and the other rules governing its operation are freely established. In the absence of a legal provision, it is agreed that all the functions provided for in Article 420 of the Commercial Code are exercised by the general meeting or the sole shareholder and the administration by the legal representative. According to Article 456 of the Commercial Code, if the legal reserve is insufficient to cover the capital deficit, the profits of the following years must be used for this purpose, so that the profits are distributed only after all losses have been covered. In this vein and in accordance with what has been established, we have that once a transformation of a company into a S.A.S. has been carried out, the obligation to maintain the legal reserve that was active in the company before the formalization of the legal reform disappears, unless it is repeated that it is included in the new statutes, Because in this case, it must continue. In general, the legal representative of an SAS performs the functions that are regularly performed by the legal representative of a company. When do legal reservations cease to apply? The law only stipulates that the reserve is constituted up to the equivalent of 50% of the share capital, once the amount is closed, it is no longer mandatory to continue to build reserves, and if this minimum amount has been exceeded, the company can freely dispose of this surplus.
In this regard, it should be noted that, since the adoption of Law 1258 of 2008, which created the simplified joint-stock company, this entity has made various declarations relating to the so-called legal reserve and has conceived that S.A.S. is not obliged to accept the aforementioned reservation in its articles of association, in accordance with the provisions of the aforementioned law. `In the absence of provisions, it is understood that the legal representative may conclude or execute all acts and contracts which form part of the object of the company or which are directly related to the existence and functioning of the company. If the appointment of the legal representative is not provided for by law, his choice is made by the general meeting or the sole shareholder. `Similarly, simplified public limited companies shall be subject to inspection, supervision or control by the company supervisory authority in accordance with the applicable legislation. Article 23 of Law 1258 does not require simplified joint-stock companies to elect a board of directors, so it is optional and, in this case, must be included in the respective articles of association. The only companies required to constitute a legal reserve are (i) companies, (ii) limited partnerships, (iii) limited partnerships by shares, (iv) foreign companies. The company may set a different majority, but it is assumed that in such a case it must be higher than the legal minimum of 50 + 1. We then have, taking into account your two concerns, that, regardless of the date of issue of concept 220-113868 by this body, if it has not been agreed in the articles of association, the aforementioned reserve, the highest legal person of the company, gathered in accordance with the relevant legal and statutory provisions, can distribute it to shareholders without there being any deadline for this. People often refer to the simplified corporation as simplified joint-stock companies, but this comparison is wrong. However, if the shareholders of an SAS wish to create a reserve with similar characteristics in the articles of association (even if they qualify it as “legal”, even if it does not have the legal obligation to do so) and refer to the provisions relating to the statutory reserve and/or introduce a calculation mechanism other than that provided by law for the constitution of this reserve, There would be no problem. The axis of the system in the SAS is the autonomy of the will.
Technically, it should be called an optional reservation, although for its complete identification it could incorporate the “legal” nomenclature into the Staff Regulations.