Company formation in Spain: SA vs SL
The main differences between the Spanish public limited liability company (SA or Sociedad Anónima) and the limited liability company (SL or Sociedad Limitada) are in terms of minimum capital stock, payment upon formation, transfer of shares or stakes or contributions to the share capital, among others.
Contractual guarantees in Spain: the personal guarantee
Personal guarantees include personal securities, which can be characterized as an ancillary obligation, since it depends on the main obligation, and as a subsidiary obligation as well, in that only if the principal debtor fails to comply is it possible to demand payment of the debt from the guarantor.
Procedure for substantial modification of working conditions in Spain
The procedure for substantial modification of working conditions is preceded by a series of consultations with the representatives of the employees which cannot exceed a period of fifteen days.
Enforceable contractual guarantees: the bank guarantee payable on first demand
Among enforceable personal contractual guarantees, the bank guarantee payable on first demand stands out. With this type of guarantee, a banking institution commits to respond to the fulfilment of an obligation, automatically and immediately, and without the ability to demand clear evidence of noncompliance.
Debt prevention measures in Spain
A debtor’s default or delay is established if the debtor cannot satisfy his obligation to pay after receiving an overdue notice. At the time of contraction, companies in Spain can take preventive steps to deter defaults from the outset and to improve their legal position in a legal dispute.
Business purchase agreements: the asset vs the share purchase agreement
A correct evaluation of both a possible purchase of the assets of a company (asset purchase agreement) or a direct acquisition of stocks and shares (share purchase agreement) will determine the best option to enter the Spanish market.
The transformation of a General Partnership into a Limited Partnership
A general partnership is a contract through which two or more people agree to a share capital, with the purpose of undertaking a business activity and distributing the profits. It is an obsolete and uncommon form in the Spanish commercial market, for which, on numerous occasions, it is necessary to transform such partnerships into an LLC or corporation.
Corporate Housekeeping Duties in Spain
For legal existence in Spain, companies must fulfil important formalities. The so-called “corporate housekeeping duties” include the registration of the company with the commercial register, the keeping of the minutes of all the meetings of the shareholders and management, the careful management of an accounting and the timely submission of the annual accounts.
Adaptation to the General Data Protection Regulation (GDPR) in Spain
The GDPR is directly applicable in all EU member states and introduces new obligations for companies. Since member states have leeway for deviations, Spain has already drafted a legislative proposal.
Procedure to move the legal headquarters in Spain
The modification of the legal headquarters of a company in Spain has traditionally been the responsibility of the general meeting. The LSC now expedites this procedure with the entry into force of the 15/2017 Royal-Decree-Law providing a new interpretation of article 285 of the LSC and thus clarifying that the change of the registered office will be the responsibility of the Administrative Body.
