Preliminary Draft Law on Structural Modifications

Following the extraordinary session of March 10, 2023 held by the Economic and Social Council of Spain, in which the Preliminary Draft Law on Structural Modifications of commercial companies transposing Directive (EU) 2019/2121 of the Parliament and of the Council of 27 November 2019 was introduced, amending Directive (EU) 2017/1132 regarding cross-border transformations, mergers and divisions, for its corresponding opinion and in which you can see the new features that the new law will bring in relation to Law 3/2009, of April 3rd, on Structural Modifications, which will be completely repealed, we analyze what new features the document contains regarding the future Law.

The aim of this Preliminary Draft and, therefore, of the future Ley de Modificaciones Estructurales, is to unify the criteria on the regime of structural modifications affecting commercial companies and to bring together in a single text all those operations that have both a national and transnational dimension (intra-Community and extra-Community operations). In this way, the aim is to avoid the forum shopping that certain commercial entities may wish to benefit from, eliminating as far as possible the differences and asymmetries existing between the Member States of the European Economic Area (EEA) affected by the Directive.

As new features to highlight, we should mention the following:

• The international transfer of domicile is now called “cross-
  border transformation”;
• All types of structural modifications will be covered, not only the cross-border mergers contemplated in the Directive, but also transformations and divisions, both total and partial;
• A better regulation in terms of publicity and transparency to provide greater legal certainty for the operation in question, in relation to workers, creditors and shareholders;
• Extend the freedom of establishment in European territory, through the possibility of both the creation and administration of companies through the structural formalities contained in the future law (in line with the provisions of Articles 49 and 54 of the Treaty on the Functioning of the European Union).

With this new regulation, the effects of which we will see in 2024 if nothing prevents it, the transposition of Directive 2019/2021 will finally be achieved, without prejudice to the fact that this transposition should have been carried out before January 31, 2023, the deadline imposed by the Directive itself.

Spain has taken a great step forward towards making the regulation in a single text of each and every one of the existing structural modifications a reality, since, as we know, the current Law 3/2009 only contemplates cross-border mergers on the occasion of Directive 2005/56/EC, which has already been transposed. With this, Spain and the rest of the EEA countries will be subject to a more unified procedure, hopefully more flexible and with fewer bureaucratic problems. Furthermore, in the absence of the full text, it will be very focused on the protection of workers, creditors and partners.