Transformation of commercial companies
The transformation of companies is the ability of a company to change its corporate type for a completely different one, without having to change the legal personality of the company. A company can be transformed from a limited liability company into a corporation, for example.
For this reason, and trying to provide a solution to the needs that a company may have, the law contemplates the possibility of changing the corporate type without having to incorporate a new company, maintaining the registered office, the nationality of the company, and the initial structure.
Many times, given the changing social and political panorama, it becomes necessary to make changes or adjustments to the commercial companies. These changes must be oriented to comply with the laws and usually seek to obtain certain benefits according to the regulatory provisions.
It is quite common for companies to find the need to transform their corporate type at times when regulatory changes occur.
How is a transformation of a commercial company carried out?
In order to carry out the transformation of a company, it is necessary that the totality of the shareholders adopt the corresponding agreement.
For it, the Administrators of the company will have to make available to the shareholders, prior to the celebration of the corresponding Meeting, the following documents:
An explanatory report justifying the need for the proposed transformation, indicating the consequences that the process will have for the shareholders. It must be accompanied by the corresponding balance sheet of the company, which must be made up of the data corresponding to the six months prior to the holding of the corresponding meeting.
It must also be accompanied by a draft of the bylaws corresponding to the type of company that will result from the transformation.
In the event that it is unanimously agreed by the shareholders at the Universal Meeting to carry out the corresponding transformation, it will not be necessary to present the corresponding documents.
For this purpose, it should be remembered that a Universal Meeting is one in which all the shareholders of a company are represented at the same time and place, that is to say, 100% of its capital stock is present at the same time and place, being able to adopt all the measures and decisions that may be appropriate without the need for a prior call.
The shareholders and the transformed company
One of the main aspects to bear in mind regarding the transformed company is related to the fulfillment of the obligations that they have.
For example, if the company is to be transformed from a limited liability company into a public limited company, it will be necessary to make the corresponding capital payment in order to comply with the obligation of the legally established minimum, i.e. 60,000 euros.
It is also important to point out that, once the separation agreement is approved, the shareholders who have voted against it can exercise their right to separate from the company.
It is important to note that, the liability of the shareholders for the personal debts assumed persists even after the transformation of the partnership.
In any case, the general rule will be the persistence of the obligations in their entirety, unless express agreements between the parties provide otherwise.
Obligation of publicity and registration
Company transformation agreements must necessarily be published in the BORME, unless the agreement is communicated to all the shareholders and creditors individually and validly. In addition to this, the effectiveness of the suspension will be subject to the correct registration in the corresponding mercantile registry. This is due to the fact that the correct inscription needs the adequate registry publicity to provide it with the necessary legal certainty.
Since a transformation of a mercantile company is considered a structural modification of a company, it is regulated in Law 3/2009 on Structural Modifications of Mercantile Companies.
In Letslaw we are experts in advising in procedures of transformations of commercial companies. Our professionals have more than 10 years of experience advising in this type of operations.
Letslaw es una firma de abogados internacionales especializada en el derecho de los negocios.