The Government has approved Decree-Law 5/2023, which seeks to increase transparency in the structural changes of commercial companies. On the other hand, it also extends the existing measures in response to the war in Ukraine and in support of La Palma.
This Decree-Law transposes Directive (EU) 2019/2121 of the European Parliament and of the Council of 27th November 2019, which amends Directive (EU) 2017/1132 as regards cross-border transformations, mergers and demergers in the EU, thus complying with the plans to harmonise company law and the transparency objectives set by the European Union.
One of the aims of the transposition is to comply with Articles 49 and 54 of the Treaty on the Functioning of the European Union, concerning the prohibition of restrictions on the freedom of establishment and uniformity in the application of European regulations, respectively. Furthermore, it seeks to promote mobility within the European Union in order to improve the functioning of the internal market.
Another objective of this regulation is to simplify the legal analysis of structural modification operations, thereby promoting corporate dialogue and giving greater importance to the rights of all parties concerned in these operations.
Several measures are introduced with the aim of boosting transparency in operations, with the purpose of favouring the creditors, shareholders and employees of companies by making them aware of the details of the operations before they are initiated. The company directors must prepare a report for the partners or shareholders and employees explaining and justifying the structural modification and the consequences it holds for them, the creditors and the company.
The section of the report submitted to the partners or shareholders must include explanations of the actual compensation proposed in the project, the type of share exchange, the consequences of the structural modification, the impact on the company’s social responsibility, and the rights and remedies available to them.
The section of the report intended for employees should contain explanations of the consequences of the operation for labour relations, substantial changes in employment conditions and the impact on the company’s subsidiaries.
Regarding the measures concerning the preparatory publicity of the agreement, it is provided that the directors of the participating companies are obliged, at least one month before the date of the general meeting at which a structural modification is to be agreed, to publish on the companies’ websites the draft structural modification, a notice to the partners or shareholders, employees, creditors and representatives of the company’s employees or to the employees themselves with comments on the draft, and the report of an independent expert if appropriate.
In order to carry out the transposition, the entire regime of structural modifications, both internal and cross-border, has been integrated into a single regulatory framework, seeking consistency at EU level in order to avoid differences that would allow more favourable regulations to be sought within the Union itself.
Oscar Vilá
Vilá Abogados
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7th July 2023
