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Analysis of the Law on Structural Modifications of Commercial Companies

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Following the recent legal news that revolves around a possible “avalanche” of insolvency proceedings and corporate transformations, I think it’s appropriate to mention that this week will mark three months since the entry into force of Royal Decree-Law 5/2023, of June 28, whose first book included new regulations on structural modifications.

The new rule was published in the BOE (Official State Gazette) on June 29 but came into force one month after its publication, and with its regulations, it sought to transpose Directive (EU) 2019/2121 of the European Parliament and of the Council of November 27, 2019, which amends Directive (EU) 2017/1132 concerning cross-border conversions, mergers, and divisions, and, at the same time, to harmonize three types of structural modifications: (i) corporate transformation, (ii) cross-border mergers of companies, and (iii) cross-border divisions in favor of newly created companies.

And, with the modifications introduced by the new Royal Decree-Law, the legislator managed to go beyond the content of the 2019 Mobility Directive since it integrated the entire regime of structural modifications, both internal and cross-border. Thus, in a single legal body, intra-European operations are provided for and, with some modulations, also the internal structural modifications. However, although the Royal Decree does not follow the same structure as the Directive, it does maintain the scope of application and recognizes the possibility that both companies in liquidation and those in insolvency proceedings may carry out structural modifications, provided that the distribution of their assets among the partners has not begun or they are not in insolvency liquidation.

Remember that the main novelty brought by the Royal Decree-Law was the introduction of new protection mechanisms for creditors (e.g., the disappearance of the opposition right and substitution by a system of adequate guarantees), partners (e.g., unification of regulations for the exercise of the right of separation or alienation and the right to cash compensations), and workers (e.g., increase in rights to information and participation in the process) of the societies affected by a structural modification.

Therefore, we can conclude that the regulation of corporate structural modifications has improved, especially those cross-border which had barely any regulation. We will see the use that Spanish companies make of it and, in the future, what jurisprudential interpretations the Spanish Courts offer in this regard.

Miquel Planas

Lawyer at MONLEX

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Monlex Abogados, con más de 30 años en Derecho Mercantil y Asistencia Legal, ha sido esencial en ayudar a las empresas turísticas en su expansión global. El bufete es parte de una red global en más de 20 países y miembro de HISPAJURIS, la principal red de bufetes de abogados de España.
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