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El blog de Maria

Your daily Spanish Law reporter. Have it with a cafe con leche.

Legal tip 332. A new corporation Law
17 August 2010 @ 11:20

The Corporation Law (LSC) whose adapted text was passed as the Royal Legislative Decree 1/2010 of the 2nd July, and came into effect from the 1st September of the same year, has meant more of a formal than actual change in the rights of companies, as its main aim is not the introduction of new rules but the summarizing of various existing laws in one single document.

The new modified text brings together, in over 500 articles, the mandates which until now, were spread across four regulations which are now either totally or partially abolished following the introduction of the LSC:  the Public Limited Company Law (LSA), Private Limited Company Law (LSRL), section 4ª of title I of book II of the Business Code (CCom) and title X of the Market Value Law, referring to limited partnerships and listed companies respectively.

The LSC is pressing to move forward towards a unification of all business law, culminating in an eventual codification:  “the general wish is that the entirety of general law which applies to trading companies, including that which is applicable to personal companies, is contained in a single legal entity, which will overcome the continuing legal plurality which the present text revokes but does not entirely eliminate”.

Bringing the business laws together in a single text, it is made clear that these are applicable to the three different types of capitalist companies, except in such cases where it is expressly specified that it only applies to one or more of them, or in other cases where there are nuances or different ways of dealing with the same question in one type of company than in another.  In the case of by-laws, for example, article 23.e of the LSC requires that Public Limited Companies indicate what their type of management structure will be, and allows Limited Companies to include various  options, letting them pick that which they consider most suitable.

In the next few years, this unification will lead to the creation of a new Business Code which will substitute the old text which has been in place since 1885 and bringing it more into line with the corresponding laws established in Europe.

By Jesus Castro

Typical house of Castellar castle by Roberto Pecino at 

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