Every company is exposed to risks and losses that can jeopardize its financial stability and assets, and remember that one of the legal bases for the dissolution and liquidation of a company is the reduction of its assets below the threshold set by law, which can be avoided if the company has built up sufficient reserves that can cover these capital reductions. With regard to the recognition of the legal reserve, it is part of the assets, more precisely in the 330505 account according to the Colombian chart of accounts alone. Reserves are means of profits made by the company to meet legal, legal or occasional requirements. Companies that are not legally required to constitute a legal reserve may be included in the articles of association. Indeed, it is not possible to charge more than the law has required, and the law only requires to constitute a reserve until 50% of the share capital is reached. The company may cease to absorb resources to provide the legal reserves if there is a legal reform that eliminates them or if the amount set out in the articles is reached. The legal reserve is calculated on the basis of the liquid profits of the year, understood as the net profit after tax, and of course that after deduction or reduction of all costs and expenses of the normal year of the company, when the reserve is used, the corresponding value is debited from the reserve account and credited to the account corresponding to the use of reserves. In this vein, it could hardly be concluded that, in the hypothesis described, it is appropriate to capitalize on the profits of the year without at the same time making appropriate use of the legal reserve, especially if the same law is clear, if it is warned that it is necessary for the distribution of profits among shareholders, if necessary the law, legal reservation and possibilities to make. and credits for the payment of taxes (Article 451 ibid.) If the company does not make profits in a year or year, is not obliged to provide resources for the legal reserve, 10% is required by law, on liquid profits, and these can not exist when losses occur. Remember that the reserve is taken from the profits of the year, so the accounting register or entry would look like this: we start with the legal reserve in the company, because it is the one that is best regulated, and the legal reserve in other types of companies usually refers to the rules of the company. « Application of the rules of anonymity with regard to the legal reserve, balance sheets and the distribution of profits. The company will constitute a legal reserve subject to the rules established for anonymous people.

The same rules apply to year-end balance sheets and profit-sharing. Let`s answer the following question: is it mandatory to decree the legal reserve in a company? The legal reserve is a type of fund or savings that companies or companies must form due to a legal mandate to protect inheritance. This legal reservation is mandatory until it remains in force, so if it is to be abolished, the statutes or statutes must be amended. The legal reserve is mandatory, provided that the company has profits on which it can determine the reservation. Simplified joint-stock companies are not required to set up a statutory reserve, although they can do so if they wish by specifying it in their articles of association according to the percentage agreed by the general meeting. Since the annual profit has a credit character, it is debited when the funds are withdrawn in order to place them in the reserve account, which also has credit. In this regard, it is obvious that the reserve favours not only the enterprise, but also creditors, since the increase in assets leads to higher solvency and credit and allows the company to have greater funds for the operation of its companies; But at the same time, this greater strength of the company`s assets also benefits creditors, who are faced with a larger amount of assets on which they can assert their rights if the company does not comply with the contractually agreed obligations. Finally, there are the occasional reserves that do not need to be provided for in the statutes, but if they can be ordered by the assembly, in this case they will be mandatory for the exercise in which they are ordered; The object of this type of reservation may be determined by the Assembly itself, which may even modify the object for which it was created; In fact, the Assembly may also distribute them among the members if their consent was not required. The only companies required to constitute a legal reserve are (i) public limited companies, (ii) limited liability companies, (iii) limited partnerships by shares, (iv) foreign companies. (a) 10 % of the liquid profits of each year shall be used to build up a legal reserve, which shall be equal to 50 % of the subscribed capital; In this context, it should now be provided that, without prejudice to their objections, it will be stressed that the above-mentioned concept should be corrected, since the legal arguments put forward at the time make it possible to repeat the conclusion which led to `.

whereas, because of the capitalisation of the profits which it intends to make, the amount of the legal reserve is reduced below the limit required by law, which is indicated in addition to the mandatory nature of the norm, it would be that, at the time of ordering the distribution of the profits of the year in question, the sum of the liquid profits which may take place under the conditions referred to in Article 452, is appropriate. The statutory reserve is constituted only if the partners determine it in the statutes of the company and the amount and its destination are determined by the same statutes. Colombian commercial legislation stipulates that a reserve representing 10% of the company`s liquid profits is constituted until the equivalent of 50% of the subscribed share capital is completed, a reserve that may exceed this 50%, which represents a surplus of the legal reserve.