Partner Disputes in Colombia: How to Resolve Them

The company was doing well — until it wasn't

We've seen this story dozens of times: two or three people build a company together, in good faith and with a great deal of energy. Then the first tensions arise — over profits, strategic decisions, who works more or who earns more — and what started as a difference of opinion ends up paralyzing the company. One partner blocks decisions at board meetings. Another withholds accounting records. A third threatens to sue.

The most costly mistake we see in these situations is not the conflict itself — disputes between partners are completely normal. The mistake is letting it escalate without intervention, until the only options left are the most traumatic and expensive ones.

What causes a partner dispute?

The most common issues that come to our desk include:

• Profit distribution: disagreements over when and how to distribute earnings, or suspicions that the numbers don't add up.
• Management decisions: a partner acting as general manager makes decisions that the others never approved.
• Exclusion from operations: a partner feels sidelined from day-to-day activities or denied access to information.
• Breach of shareholder agreements: commitments made verbally or in writing that one partner fails to honor — rights of first refusal, non-compete clauses, capital contribution obligations.
• Entry or exit of partners: especially when there is no clear protocol for valuing ownership interests and someone wants to sell or leave.

Each of these scenarios triggers different legal mechanisms. The applicable rules depend on the type of company: a SAS (Sociedad por Acciones Simplificada, a simplified stock corporation governed by Law 1258 of 2008) operates under a very different framework than a limited liability company (sociedad limitada) or a corporation (sociedad anónima) under the Colombian Commercial Code. That difference matters more than most partners realize.

Ways to resolve the dispute: from least to most forceful

1. Direct negotiation with legal support

This may sound obvious, but most parties who reach this stage have already tried talking on their own — and it didn't work. The difference when an attorney is involved is that the negotiation takes place with a clear understanding of what each party is entitled to demand, what evidence supports that position, and what the real consequences of failing to reach an agreement are. That changes the conversation.

If the parties reach an agreement, it is formalized in a shareholders' agreement or through an amendment to the company's bylaws, registered with the Chamber of Commerce (Cámara de Comercio). Without that formalization, the agreement carries little weight before a court.

2. Alternative dispute resolution (ADR)

When direct negotiation fails, Colombian law offers more formal but more agile options than ordinary court proceedings:

• Mediation: a neutral third party facilitates dialogue. The mediator does not impose a decision, but helps the parties reach one themselves. It is confidential and relatively fast.
• Conciliation (conciliación): similar to mediation, but the conciliator may propose settlement terms. Any agreement reached has the force of res judicata — meaning it is equivalent to a court judgment — and constitutes an enforceable title, so if a party fails to comply, enforcement can be sought directly before a court without the need for additional proceedings.
• Arbitration (arbitramento): a panel of arbitrators — experts selected by the parties — reviews the case and issues a binding award (laudo arbitral) with the same force as a court judgment. This is the most formal ADR option and the most appropriate when the dispute is technically complex or involves significant sums. Many company bylaws already include an arbitration clause (cláusula compromisoria) requiring the parties to go to arbitration before resorting to the courts.

3. Judicial proceedings before the Superintendency of Companies

When the dispute cannot be resolved through the methods above, the Superintendencia de Sociedades (Colombia's Superintendency of Companies) has jurisdictional authority — meaning it acts as a court — over disputes arising within commercial companies. It may order precautionary measures (such as suspending shareholders' meeting resolutions), rule on the validity of corporate acts, or order the dissolution of a company when the conflict makes normal operations impossible.

This route is slower and more expensive. Reaching this point without having exhausted the earlier options generally means the conflict is already at its worst.

What happens if you don't act in time

This is where cases truly become complicated. When a corporate dispute is left unresolved:

• Shareholders' meeting resolutions may be tainted by nullity if they were adopted without meeting quorum requirements or without proper notice.
• Partners who act unilaterally — draining accounts, making decisions outside the company's corporate bodies — may face civil liability, and in some cases, if assets are misappropriated or fraud is involved, the matter may cross into criminal territory.
• The company may reach a permanent deadlock — where no partner holds a sufficient majority to make decisions — which paralyzes it and can lead to forced liquidation.
• Deadlines for challenging shareholders' or partners' meeting resolutions are short. The exact deadlines depend on the specific circumstances of your case — we will clarify them in a full consultation — but suffice it to say that waiting too long means losing the ability to challenge a decision that was harmful to you.

At Consejurídico, we have seen disputes that could have been resolved in two weeks of mediation turn into two-year proceedings before the Superintendency of Companies, with the company virtually destroyed along the way. The cost is not only financial.

What we recommend before making any move

• Review the bylaws and the shareholders' agreement (if one exists): that is the first set of governing rules. Many people have no idea what the document they signed actually says.
• Do not take unilateral action before establishing whether you have legal grounds to do so. A poorly calculated move can make you appear to be the party responsible for the conflict in the eyes of an arbitrator or judge.
• Get a proper valuation of your ownership interest if you are considering leaving or buying out the other party. Exiting below fair value is one of the most common mistakes — and it is almost always irreversible.
• Document everything: emails, meeting minutes, messages. In a corporate dispute, the party with the evidence holds a significant advantage.

Our team at Consejurídico handles these cases in an interdisciplinary manner: the corporate, civil, and — when it arises — criminal dimensions, all under one roof. This means our clients never have to search for a second attorney in the middle of an already stressful process.

If you are in the middle of a dispute with your partner — or sense that one is brewing — the first step is to clearly understand what real options you have based on your company type and what your documents say. Juri, Consejurídico's legal assistant, can provide that initial guidance right now, with no appointment and no upfront cost. Sometimes ten minutes of clarity is all it takes to avoid two years of litigation.

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