The New Commercial Code in Spain regulates the general provisions applicable to all corporations, differentiating between two broad categories: partnerships and venture capital companies.
Within each category, there is a distinction between common provisions and particular or special provisions, such as public limited partnerships within partnerships and private limited companies and public limited companies within venture capital companies.
The provisions also incorporate the rules relating to European companies based in Spain, the issuance of bonds and limited partnership by shares.
- The Code arranges the financial statements, the amendment of the statutes, structural changes and separation and exclusion of partners. Also regulated are dissolution, liquidation and termination of corporations, listed companies and joint ventures.
- The Code emphasizes the establishment of the principle of equal treatment of shareholders under identical conditions, the regulation of the corporate website or the electronic domain of the company. Special attention is given to regulating methods of adopting corporate arrangements including, the rights of minorities and the administration of the company to challenge such arrangements. On the latter issue, basic rules on capacity to be an administrator, basic competence and power of representation are incorporated.
The Code reverses regulations on venture capital companies in favour of the public limited company, the preferred type of company. Many of the rules apply in favour of the private limited and public limited companies.
The Code aims to achieve greater correspondence between the capital of a company and the chosen corporate structure. Therefore, public limited companies must have a minimum amount of 3,000 euros in capital shares, whereas in venture capital companies the minimum is 120.000 euros.
- The Code details new techniques for electronic and simplified incorporation and incorporation in the special case of a public limited company with capital below the legal minimum. This was recently regulated by the Spanish Law in Support of Entrepreneurs.
- To overcome difficulties in the process of terminating a liquidated company due to a lack of assets, the code introduces a process — in the corporate rather than bankruptcy field — to determine whether there is the possibility of reintegration or paying the deficit justifying the bankruptcy declaration or if the company should continue with termination and cancelation of the registration of the company.
The New Code maintains the differential treatment of listed companies established in the revised text of the Corporations Act 2010, along with some new features. It details the rules corresponding to company law and addresses issues such as the prohibition of restrictions on voting rights, the right to know the identity of shareholders, prior information of the general meeting, the right to submit new proposals for agreement and the specialties on the right to information.
Coordination with good rules of governance translates into greater momentum from the beginning to have balanced participation of both women and men on the boards of listed companies.
The Code is also responsible for shareholders associations and forums, the rules of public request for representation, conflict of interests and the types of directors, among others.
This draft legislation takes on the regime on joint ventures, economic interest groups, and temporary business unions. The concept of a group of companies is based on the criterion of control; i.e. a subordinate or hierarchical structure with a parent company and subsidiaries. However, it does not dispense with the existence of coordinating groups where two or more independent companies operate under a single management.
This article is not considered as legal advice