The reform of the Capital Companies Law has been recently published in Law 5/2021, of April 12. This law amends once again the current Capital Companies Law, which, except for specific cases, will enter into force on May 3.
This Law has had a greater impact on listed companies, collective investment institutions and venture capital entities. More than anything else, it introduces transparency measures. However, we cannot lose sight of the fact that it affects, albeit to a lesser extent, public and private limited companies.
The experts of our Legal Department clarify the changes introduced.
Reform of the Capital Companies Law
Now the regulation addresses changes that affect the administrators. In a double sense:
- On the one hand it modifies, expanding it, the concept of diligent administrator. On the one hand, it modifies, extending it, the concept of diligent administrator, who must not only perform the position and fulfill the duties imposed by the laws and bylaws with the diligence of an orderly businessman. They must also subordinate their own interests to the interests of the company. In other words, the interests of the company take precedence over those of the administrators.
- On the other hand, it broadens the concept of parties related to the directors. Considering as such those companies in which they directly or indirectly have a significant influence. And thus a shareholding equal to or greater than 10% of the share capital or voting rights. In this way it has been possible to obtain, de facto or de jure, a representation in the administrative body of the company.
As a novelty, the rule contemplates the possibility of holding fully telematic meetings, if the Bylaws so provide. The identity of the persons appearing at the meeting must always be assured. And the notice of meeting must describe the deadlines, forms and ways of exercising the rights of the shareholders.
Relationship between related companies
Finally, this reform of the Capital Companies Law specifically regulates intra-group related-party transactions. For all capital companies, Art. 231 Bis is added in this respect.
It should be clarified beforehand what the rule means by conflict of interest. There is a conflict of interest between the parent company and the subsidiary when the latter is a significant shareholder of a person with whom the company could not carry out the transaction directly without applying the regime for transactions with related parties. In such a way that we can find the following situations.
In the case of transactions between the parent company and group companies subject to a conflict of interest.
The Board of Directors is responsible for approving such transactions when the value of the transaction or set of transactions included in a framework agreement exceeds 10% of the total assets of the company.
In the event that the transaction does not reach the above thresholds, it may be adopted by the administrative body. However, the directors of the controlling companies must prove that the agreement is in accordance with the corporate interest. And they have acted diligently and responsibly in case it is challenged.
If the transaction between the parent company and other companies of the group is not subject to a conflict of interest.
It may be executed by the management body, provided that they are transactions entered into in the ordinary course of business. And they are carried out under market conditions. However, the administrative body must implement an internal procedure for the periodic evaluation of compliance with the aforementioned requirements.