Royal Decree-Law 5/2023, of June 28, effective from July 29, approves a new comprehensive regime for structural modifications of commercial companies, both domestic and cross-border. Among other changes, shareholders of Spanish companies participating in a structural modification who, as a result of that modification, will become subject to foreign law, will have the right to sell their shares or holdings in exchange for appropriate cash compensation.
We inform you that in the Official State Gazette (BOE) of June 29, Royal Decree-Law 5/2023, of June 28, which introduces modifications to the procedure for structural modification of companies and to the rules that govern it.
The regulation comes into force on July 29, with a transitional regime for the application of the previous regulations (Law 3/2009, of April 3, on structural modifications of commercial companies) for the case of commercial companies whose projects have not yet been approved by the companies involved prior to the entry into force of this Royal Decree-Law 5/2023.
Structural modifications of a company are understood to be changes that go beyond simple amendments to its bylaws and affect its asset or personnel structure. These operations include transformation, merger, division, and the global transfer of assets and liabilities. In some cases, a change of registered office to a foreign country may also be considered a structural modification.
The reform transposes European Directive 2019/2121 regarding "international transfers of registered office," which are now termed "cross-border transformations," incorporating into national legislation measures previously recognized in the Directive for cross-border structural modifications. It contemplates two models of modifications and also addresses the scenario where the merging companies are not both owned by a single shareholder.
The requirements for domestic corporate spin-offs are also being adapted, making them more flexible and thus bringing them closer to those required for cross-border spin-offs. Domestic spin-offs will now operate under a regime similar to the European one, whereby the spun-off company's liability is limited to its net worth with respect to the debts it incurs after the spin-off or spin-off; this reduces the incidence of insolvency proceedings.
Protection of partners and creditors
The reform will provide greater protection for the rights of partners and creditors.
With regard to the creditors, they will be aware from the moment of the proposed modification of the risks that this entails for them, as well as the guarantees that they will have with respect to their credits, to which they may make observations before the general meeting, since they have the right to have these guarantees be "adequate" and the Commercial Registrar must mediate in case of disagreement before resorting to the judicial route.
Shareholders , they become subject to foreign law. Shareholders of Spanish companies participating in a structural restructuring who, as a result of that restructuring, will become subject to foreign law are entitled to appropriate compensation.
You can contact this professional office for any questions or clarifications you may have.
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