Spain: Approval of the reform on structural modifications to commercial companies

Spain - 30 / 06 / 2023

The reform, which repeals Law 3/2009 and makes numerous new additions to the provisions on structural modifications, will come into force on July 29, 2023.

Royal Decree-Law 5/2023, of June 28, 2023, adopting and extending certain measures in response to the economic and social consequences of the war in Ukraine, to support reconstruction of the Island of La Palma and other vulnerable situations; transposing EU Directives on structural modifications to commercial companies and on work-life balance for parents and carers; and implementing and complying with EU law, was published on June 29, 2023 in the Official State Gazette.

Among many other measures, the royal decree-law repeals Law 3/2009 of April 9, 2009 on structural modifications to commercial companies.

Book one, which will come into force on July 29, 2023 (a month after its publication), contains the new provisions on structural modifications.

A transitional provision states that the new rules will apply to structural modifications to commercial companies for which the relevant projects have yet to be approved by the companies involved before the entry into force of the royal decree-law.

Its wording does not clarify whether or not the new law applies to transactions in progress - with a prepared (formulado) project- which have not been approved by the shareholders’ meeting before July 29, 2023.

The new provisions, transposing into Spanish law Directive (EU) 2019/2121 of the European Parliament and of the Council of 27 November 2019 amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions, amend numerous components of the rules on structural modifications.

The main changes to the provisions on non-cross border transactions consist of including several elements that the EU directive contemplates for intra-European conversions, mergers and spin-offs (divisions).

The most notable elements are the new mandatory mentions in the projects, the employees’ broader information rights, and a new set of creditor protection rules.

In the main, the new rules on intra-European cross-border structural modifications simply transpose the directive, covering intra-European spin-offs (divisions) for the first time.