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Benefits For 'Small Businesses Owned By Young People'

Author:Ms Mónica Serrano, Luis Felipe Barrios and Myriam Montenegro
Profession:Barrios Montenegro Abogados
 
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Law 1780 of 2016, best known as ProYouth Law, promotes the generation of employment and entrepreneurship through a series of benefits for Small Businesses.

The benefits established in this law apply to Small Businesses where at least 50% + 1 of the capital is owned by persons under the age of 35 and for people who intend to register as merchants and that are up to 35 years old.

According to article 2 of said law, Small Businesses are those that: (i) have less than 50 employees and (ii) have total assets that do not exceed from 5.000 monthly minimum wages.

Small Business and/or people fulfilling the above conditions will be exempt from paying the commercial registration and its renewal, during the first year following the date of their register before the Mercantile Registry.

Please note that the above exemption applies only to payments related to the commercial registration. In this sense, the Small Business and/or merchant shall pay the other expenses that may arise at the time of the incorporation, such as notary fees, registration taxes, etc.

The exemption will be lost if the Small Business and/or merchant (i) fails to renew its commercial registration within the first 3 months of the year, (ii) fails to pay contributions to the Social Security System and other payroll contributions, or (iii) fails to comply with its tax obligations.

According to article 6 of the ProYouth Law, Small Businesses whose corporate purpose, payroll, domicile, commercial establishments or assets are the same as those of a dissolved, liquidated, divided or inactive company, will not be able to access the benefits of the law. The term inactive companies shall be understood as those that: (i) Have not hired personnel for at least one...

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