New Law On Structural Modifications Of Companies Passed

25 June 2009

The preamble to said Act defines this type of operation as “any alterations to the company that go beyond simple by-law modifications to affect the asset or personnel structure of the company”. It is mainly focused on company transformations, mergers, spin-offs and transfers of assets and liabilities in their entirety. The first three categories have already been regulated in the Spanish Corporations Act whereas the last one is a novelty in Spanish company law.

The aforementioned law likewise serves as a precursor to the formal overhaul of Spanish company law. In effect, final regulation no. 7 authorizes the government to pass a Capital Company Act which incorporates and harmonizes four areas of regulations: articles 151-157 of the Code of Commerce dedicated to limited partnerships; Royal Legislative Decree 1564/1989 dated December 22 which approved the consolidated text of the Spanish Corporations Act; Law 2/1995 dated March 23 of Limited Liability Companies and Title X of Law 24/1988 dated July 28 of the Securities Exchange which regulates quoted corporations.

Lastly, and in view of the Cartesio ruling which allowed this procedure, there are regulations governing the moving of a company from one country to another by transfer of the company seat (related on-line news article published on 16/02/2009 on www.mmmm.es) .

For further information please contact Nerea Tejeda García de Cortázar: ntejeda@mmmm.es