The benefits of legality and the risks of informality

Avoid the risks arising from running an informal business. 

 The benefits of legality The risks of informality

• Your company will have a unique, protected name.
• More growth opportunities.
• Your business is real.
• You can become a vendor for other companies.
• Sell to other markets.
• Access cheaper credits and loans.
• Receive discounts in labor contributions.

• Slow business growth.
• High probabilities of bankruptcy.
• More obstacles to get loans and credits.
• Less productivity.
• Loss of business opportunities.
• Small competitive capabilities in new markets.
• Limited human resource.
• Higher costs from employee accidents or illness.
• Fines due to breach of regulations.
• Difficulties partnering with companies.

Myths about corporate legalization

There are several myths around corporate formalization, which include: 

I have operated for a long time without a Merchant's Registration, and I have had no problems.  I did not know the Merchant's Registration was mandatory.


It is mandatory for everyone involved in commercial activities to be listed in the Merchant's Registrar and to record in it all actions, ledgers and documents covered by law. 

False
According to Article 19 of the Commerce Code

Be up-to-date with the renewal of your Merchant Registration, and continue doing business as usual.  Access the benefits extended by the National Government through the Formalization and Job Generation Law, with incentives to entrepreneurs who have not fulfilled their obligation to renew during several years.  

I was told the RUT was enough.

I inquired at DIAN, and I was told that after six months I can register my business.

Applying for the Single Fiscal Registrarion (RUT) is one of the requirements to be listed in the Merchant's Registrar.  This proceeding can be carried out as soon as you start operating. 

False
According to Numeral 1 of Article 28 of the Commerce Code

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