The council of ministers approved on the 2nd of July a the Redrafted Text regarding the Law of Capital Companies through the Royal Legislative Decree 1/2010, in which one legal document unifies the respective norms regarding public limited companies, limited-liability companies, public companies and partnership limited by shares, in other words all capital companies existent in our system.
According to the informative presented by the council of ministers, this new law, which was in force by the 1st of September 2010 (except article 515, in respect to the abolition of the limitative clauses referring to the right to vote, which will be in force from the 1st of July 2011), « puts an end to the unsatisfying organization of the different types of companies, as well as imperfections and loop holes. »
The outlined situation stems from the fact that there were two independent legal texts: the Redrafted Text of the Law of Public Limited Companies of 1951 and The Law of Private Limited Companies of 1953, whose imperfections and legal loop holes had only been resolved through jurisprudence. Just as well, these two norms should be coordinated with the norms covering public companies and partnership limited by shares.
The necessity of coordinating this diverse regulation was highlighted in the Law 3/2009, which concerned structural modifications of commercial companies. In addition to adapting Spanish Law in line with European norms and reforming the structural modification regime, the stated law introduced in its seventh final disposition, an authorization for the government to create one only text which regulates all capital companies within twelve months.
As a consequence, with the approval of the new Law of Capital Companies, since the 1st of September, the Redrafted Law of Public Limited Companies of 1989 and the Law of Limited-Liability Companies have been repealed. Just as various articles have been abolished from The Law of Stock Markets of 1988, as well as The Code of Commerce of 1885 (within them, articles 151 up to 157 which concern partnership limited by shares).
We would like to outline the statement of intent of The New Capital Company Law. Firstly, it is clear the legislator’s intent to unify in one only text the norms specified before. In second place, we should emphasize a triple objective of great importance: regulation, clarification and harmonization of the stated norms. As a consequence this law has not only reproduced the norms of capital companies but has also carried out modifications which need to be taken into account in daily practice.
Just as it is exposed in the introduction of the law, in order to reach the objective of regulation « it has been attempted to modify, on occasions, the systematic character whilst at the same time reducing the imperfections of the normative propositions » although the redrafted text « contains the complete content that it set out to redraft »
Just like this, together with the regulation, certain clarifications are made in regards to interpretative doubts that could emerge within those norms that are being reformed.
In regards to the third objective, that of harmonization, we should highlight the abolition of various references in the production of solutions which in principle where only intended for one type of company. The statement of intent stated that the new company law has been organized based on appropriate subject matter with appropriate generalizations, « without prejudice of including within each chapter or section, or inclusively within each article, the regulatory features of each type of company, only when such features are existent and effective. »
As an example of a modification that goes beyond a mere redrafting of norms, we highlight the modification introduced for the minimum company capital required, this sum is rounded in order to avoid quantities that contain decimals when the conversion of pesetas to euros is carried out. Therefore public limited companies are to possess a minimum registered company capital of 60.100 euros (instead of the quantity existent before which was 60.101.21 euros) and limited-liability companies are to possess 3,000 euros (instead of the quantity existent before which was of 3.005.06 euros)
Concluding, it should be noted that the approval of the new Capital Company Law is a significant development in the organization of rules existent in this ambit, although it does not eliminate completely the lack of unification. For this reason, in section V of the statement of intent it is stated that the new text is redrafted with « an intended provisional character« , with the purpose that in the future new and important reforms will be carried out. It is also hoped that a unique legal document be created which contains « the complete law on commercial companies which includes the appropriate applicable provisions for partnerships« . The confidence in the legislator’s hope for the anticipated reforms is such that, in the statement of intent there is reference to a possible approval of a « Code of Commercial Companies » and even a possible new « Commercial Code« .
If these stated legal documents were to be approved, it would not be an overstatement to declare this reform as ambitious, given that there would have to be an adaptation to the current system of the current « Commercial Code » of 1885, which was evidently approved 125 years ago.
Lawyer Mariscal & Asociados, Abogados
Conde de Aranda 1, 2º iz 28001 Madrid – Spain
t: +34 91 564 64 32 – f: +34 91 564 46 17