In recent years, legal reforms in Spain have aimed to adapt to a more dynamic business environment by simplifying procedures and reducing bureaucratic burdens. In this context, Royal Decree-Law 5/2023, enacted on June 28, transposed European Union Directives on structural modifications of commercial companies (the RDME). Its primary objective is to expedite processes and facilitate the execution of these operations.
What are structural modifications?
Structural modifications refer to significant changes in a company’s organisation and operations, such as transformation, merger, demerger, and the universal transfer of assets and liabilities. These operations may arise for internal or external reasons, such as organisational needs, financial restructuring, or market competitiveness.
Previously regulated under a 2009 law, structural modifications, nationally and internationally, required modernisation for alignment at the EU level.
The RDME achieves this goal by repealing the previous law, establishing a new legal framework in Spain, and simplifying some critical requirements.
Simplification of requirements: What does it entail?
The simplifications aim to streamline the legal procedures for structural modifications to reduce the time required to formalize these operations under defined conditions. The following three cases are particularly noteworthy:
Exemption from filing the modification project
The new regulation generally eliminates the requirement to file or publish the project formulated by the administrators, provided that the operation is approved unanimously in a universal shareholders’ meeting and without prejudice to the respect of workers’ information rights.
Removal of the waiting period for the shareholders’ meeting
If the companies involved in the operation do not have employees, the mandatory waiting period of one month between project formulation and the shareholders’ meeting may be waived. For this purpose, the regulation excludes employees who are part of the administrative or management board.
Reduction in required documentation
Common provisions applicable to all structural modifications mandate the preparation of documents (e.g., reports by administrators and independent experts) to protect creditors, shareholders, and employees. However, specific provisions for each type of modification allow simplification or elimination of these documents, especially in intra-group operations.
The regulation is structured into a block of common provisions for all structural modifications, followed by specific rules for each type. It necessitates a detailed review of the entire regulation for each modification to identify applicable simplifications in the operation process.
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