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
  • Receive support from the CCB in the process to formalize your company with a broad portfolio of opportunities to continue strengthening your business.
  • Become eligible to work as a State contractor. Review the requirements here (spanish version).
  • Get assistance on the key steps to become a successful vendor and become a supplier to the largest companies in the country. 
  • Gain access to better financing opportunities for your company. For example, review credit lines with Bancoldex.
  • You can become a beneficiary or apply for the enterprise strengthening programs offered by INNpulsa; learn more about the invitations.
  • Participate in the Compre Colombiano (Buy Colombian) program and access other services made available by the Ministry of Trade, Industry and Tourism as well as by Propaís, for formalized micro and small entrepreneurs.
  • When you formalize your work, your social security improves. Learn about the benefits the Comprehensive Social Security System affords its affiliates.  
  • The VAT, invoiced by your company, can be discounted. 
  • Inability to participate in public contracting or procurement processes.
  • Improper practices to lend your name or Tax ID (NIT), which make you lose money and even your customers.
  • Appearing to new customers as an unreliable vendor or as one which is not in compliance with the minimum legal standards.
  • Sanctions imposed by inspection, oversight and control institutions when visiting your business.
  • If you are informal, medical expenses are significantly higher than when you are covered by the Comprehensive Social Security System, and also you service coverage is smaller.
  • Another company can use your company's name. The legal name will be the one registered first with the Bogotá Chamber of Commerce.
  • You cannot access the benefits the government extends to entrepreneurs. 

 

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

At the CCB we understand formalization as the exercise of an economic activity under the rules and laws of the State.  For us, this is a process of economic inclusion that favors your company's growth, as well as its ability to act as a vendor for other companies, reach other markets, access credits and loans and all of the Enterprise Strengthening services offered by the chamber, as well as participating in different financial programs run by different Government institutions. 

We invite you to make a free, personalized assessment of your business idea, with all information treated as confidential.  You will then be able to access a services pathway that matches your needs and will get you the assistance you need to consolidate your entrepreneurial project. 

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