Below are some considerations on the new cause for dissolution due to non-compliance with the going concern hypothesis (GCH), its suspension and the permanence of the cause for dissolution due to losses as a consequence of the provisions of the bylaws.

A. Verification of the occurrence of the cause for dissolution due to non-compliance of GCH

Before the issuance of Law 2069 of 2020 (Entrepreneurship Law), the Commercial Code established the grounds for dissolution due to losses consisting of a decrease in net worth below 50% of the subscribed capital.

The Entrepreneurship Law replaced this cause with a new one, based on non-compliance with the going concern hypothesis. This new cause is not limited to an objective verification of the comparison between equity and capital, as was the case with the loss cause, but rather implies that the administrators must make an analysis of the financial and operating situation of the company. According to the Superintendency of Companies (Official Letter 220-016853 of February 24, 2021), management must consider the current events and project into the future of the company at least 12 months, but not limited to this time, from the closing The exercise. The criteria mentioned by the Superintendency of Companies include: (i) negative cash flows; (ii) difficulty in accessing bank loans in the short term; (ii) renegotiation or restructuring of loans; (iii) failure to pay creditors; (iv) shortage of essential supplies for the operation, among others.

Faced with the evaluation of compliance with the going concern hypothesis, the Superintendency of Companies, through Official Letter 220-034919 of March 28, 2021, indicated that in accordance with numeral 15 of Decree 2101 of 2016, entities may be under any of the following scenarios: a) There are no significant uncertainties related to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern, but management has made the decision to liquidate the entity and the value of its assets or liabilities has been significantly affected. It is in this scenario, when the provisions of this standard should be applied. b) There are significant uncertainties related to events and conditions that may cast significant doubt on the entity’s ability to continue as a going concern, but the going concern assumption remains appropriate. c) The going concern assumption is not appropriate because the entity has no real alternatives other than terminating its operations or going into liquidation. It is in this scenario, when the provisions of this standard should be applied.

The Superintendency also stated that companies that do not comply with the going concern hypothesis could not be admitted to a reorganization process provided for in Law 1116 of 2016, nor to the “Emergency Negotiation of Reorganization Agreements”, nor to the “Abbreviated reorganization process for small insolvencies”, provided for in Legislative Decrees 560 and 772, respectively.

In general terms, according to the Superintendency of Companies, during the verification of the GCH, it must be analyzed whether the financial situation of the company results in an imminent liquidation, since no alternative is found to continue its operation. This cause will also be incurred when there is an intention to liquidate and close operations, but in the words of the Superintendence of Companies (Official Letter 220-033879 of March 06, 2018) when citing concept 115-243594 of December 14, 2016 of Accounting Research and Regulation Group, “the sole intention of liquidating in the future is not enough to not comply with the going concern principle”.

A decree project is in progress in the Ministry of Industry and Commerce through which it is intended to regulate, among others, the moment in which the occurrence of the GCH cause must be verified and the financial reasons or criteria to establish patrimonial deterioration and insolvency risks, to the extent that the Entrepreneurship Law states that the financial reasons or criteria to establish the cause may be established in the regulations.

B. Review and reform of the bylaws regarding the causes of dissolution of the company

In accordance with the provisions of numeral 5 of article 218 and numeral 1 of article 457 of the Commercial Code that refers to the causes indicated in article 218 of the Commercial Code, companies are also dissolved for the causes that expressly and clearly stipulated in the bylaws. The same occurs in simplified stock companies (SAS) by virtue of the contractual autonomy provided for in Law 1258 of 2008.