The Superintendence of Public Utilities modifies its position concerning public utilities companies incorporated as simplified stock companies
Last May 11th, 2017, the Superintendence of Public Utilities (the "SSPD", as per its Spanish acronym) issued Concept No. 35 with the purpose of unifying its position concerning "the possibility of incorporating public utilities companies as simplified joint stock companies, Law 1258 of 2008".
This issue has been under discussion since the enactment of Law 1258 of 2008, which introduced simplified stock companies ("SAS", as per its Spanish acronym), which could have a single shareholder (article 1) and are not subject to the obligation of having board of directors (article 25).
Besides, Law 142 of 1994 ("Law 142") states that public utilities companies ("ESP", as per its Spanish acronym) must be stock companies (article 17), which extends to SAS. However, under Law 142, legal framework applicable to ESP would be same Law 142, including, among others, the principle of shareholder's plurality and the obligation of having board of directors. Consequently, since 2009 the SSPD has understood that ESP incorporated as SAS must have at least five shareholders (provided that Law 142 refers to article 374 of the Commercial Code) and must have board of directors.
Nevertheless, hereinafter the SSPD approach will be different. The main reason for said change consists of observing the main features of SAS and not creating additional barriers to entrepreneurial freedom. Therefore, ESP incorporated as SAS are allowed to have a single shareholder and may not have board of directors, and will be "subject to strict proceedings as the dismissal of the legal entity and the annulment and damage indemnity upon cases of encroachment", according to Law 1258.
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