Law 1/2012 of 22 June on Simplifying Information and Documentation Obligations for Mergers and Spin-offs of Capital Companies

OFFICIAL STATE GAZETTE
No. 150 Saturday, June 23, 2012 Sec. I. Page 44680
I. GENERAL PROVISIONS
HEAD OF STATE
8406 Law 1/2012, of June 22, on simplifying the information and documentation obligations for mergers and spin-offs of capital companies.
JUAN CARLOS I
KING OF SPAIN
To all who see and understand this.
Know ye: That the General Courts have approved and I come to sanction the following law.
PREAMBLE
I

1. The incorporation into Spanish law of European Union Directives on capital companies has generated a continuous process of reform in this sector of the legal system. From Law 19/1989, of July 25, on partial reform and adaptation of commercial legislation to the Directives of the European Economic Community on companies, which incorporated into domestic law the Directives approved until then, to the most recent Law 25/2011, of August 1, on partial reform of the Capital Companies Law and incorporation of Directive 2007/36/EC of the European Parliament and of the Council of 11 July on the exercise of shareholders' rights in listed companies, frequent modifications of company law have succeeded one another. That reform process for the mandatory community harmonization has run parallel to the modernization of the law of this type of companies, whose legal regime, having overcome the duality of laws—the Law on Joint Stock Companies and the Law on Limited Liability Companies—is now contained in the Consolidated Text of the Capital Companies Law, approved by Royal Legislative Decree 1/2010, of July 2.
   In the matter of mergers and spin-offs, the Spanish legislator's first option was to incorporate the content of Directive 77/855/EEC of 9 October 1978 on the mergers of joint stock companies, and Directive 82/891/EEC of 17 December 1982 on the spin-off of those companies, into the special laws regulating joint stock companies and limited liability companies (articles 6 and 13 of Law 19/1989, of July 25), but subsequently, upon the incorporation into domestic law of Directive 2005/56/EC of the European Parliament and of the Council of 26 October 2005 on cross-border mergers of capital companies, and of Directive 2007/63/EC of the European Parliament and of the Council of 13 November 2007 amending the Third and Sixth Directives, the option was chosen—following the solution already advocated by the 2002 Proposal for a Code of Commercial Companies—to approve Law 3/2009, of April 3, on structural modifications of commercial companies, in which, taking the regime of the Directives as a model, the transformation of companies, merger and spin-off, global transfer of assets and liabilities, and international transfer of the registered office are regulated together. In this process of modernization and improvement of the legal regime of capital companies, the contribution of the Commercial Law Section of the General Codification Commission and, within it, the Working Party on Company Law, has been essential, to which largely belongs the merit that Spanish law in the matter of companies has recognized quality. cve: BOE-A-2012-8406

OFFICIAL STATE GAZETTE
No. 150 Saturday, June 23, 2012 Sec. I. Page 44681
2. In recent years, the European Union has embarked on a policy of simplifying the law of capital companies, especially for the reduction of costs and the simplification of burdens. Until now, that policy has resulted in Directive 2006/68/EC of the European Parliament and of the Council of 6 September 2006, amending Council Directive 77/91/EEC as regards the formation of the public limited liability company and the maintenance and alteration of its capital, the content of which has been incorporated into Spanish law by Law 3/2009, of April 3 (final provision first). Spanish legislation, for its part, has continued that process, within the margins permitted by the Community Directives, in the aforementioned Law 25/2011, of August 1, in such important matters as the convening of the general meeting, press publicity of certain statutory modifications, the deposit of annual accounts, and the legal regime of liquidation.
The same objective of simplification responds to Directive 2009/109/EC of the European Parliament and of the Council of 16 September 2009, amending Council Directives 77/91/EEC, 78/855/EEC and 82/891/EEC, and Directive 2005/56/EC as regards information and documentation obligations in the case of mergers and spin-offs. The fact that the deadline for incorporation into Spanish law of Directive 2009/109/EC ended on June 30, 2011, justified the use of the figure of the royal decree-law. First, because Spanish capital companies must not have a more rigorous legal regime than companies subject to the legislation of other Member States, with negative effects, moreover, on competition with other legal orders of the Union; and, secondly, because of the burdensome economic consequences of the fine that the European Union would impose on Spain if the delay in transposition persisted. Thus, the circumstances of extraordinary and urgent necessity that, according to Article 86.1 of the Constitution, enable the Government to adopt provisions with the rank of law by royal decree-law were undoubtedly present.
3. The incorporation into Spanish law of the provisions of Directive 2009/109/EC requires, first, the modification of the Capital Companies Law in order to add new exceptions to the requirement of an independent expert report for the valuation of non-cash contributions in the joint stock company, and requires, secondly, and above all, the modification of some articles of Law 3/2009, of April 3, on structural modifications of commercial companies in order to simplify, in accordance with what is established in that Directive, certain particulars of the legal regime of mergers—including cross-border ones—and spin-offs. To the extent that the regime for spin-offs is regulated by reference to the requirements for mergers, with no other exceptions than those contained in Chapter II of Title III of the aforementioned Law 3/2009, of April 3, the rules referring to mergers are the most affected by this reform.
II

1. In the matter of mergers and spin-offs, Directive 2009/109/EC simplifies in certain cases the number or content of the documents that must be made available to shareholders and streamlines these corporate operations by channeling publicity prior to the merger agreement through the corporate website of capital companies as an alternative to the deposit of the merger and spin-off projects in the Commercial Registry. In the same line, it provides that, if the shareholder accepts it, communications that the company must make may be carried out by electronic means.
   This Law incorporates these innovations, taking special care that this simplification does not affect the adequate protection of creditors and workers of the company. The incorporation has been carried out taking very much into account the regulatory framework in which the novelties contained in Directive 2009/109/EC are inserted, with respect to the general principles of policy and legislative technique with which the very complex Law 3/2009, of April 3, was drafted; and hence the need to give a new wording to various articles of Title II of said Law. cve: BOE-A-2012-8406

OFFICIAL STATE GAZETTE
No. 150 Saturday, June 23, 2012 Sec. I. Page 44682 At the same time, with the purpose of facilitating the functioning of commercial companies and making possible the increasingly urgent cost savings, this Law promotes the website and electronic communications; and it does so by including within Chapter II of the Capital Companies Law the general legal regime of the website and the express provision of those electronic communications between the company and the shareholders. As for the general legal regime of that website—which is mandatory for listed companies—the creation, modification, transfer, and suppression of the same are regulated, the duties of the administrators regarding what is inserted in it are established, and issues regarding the interruption of access are disciplined.
2. The Law is faithful to the traditional configuration of the right of opposition of creditors in Spanish legislation, in which the recognition of this right is not conditioned on the financial situation of the debtor company making special protection necessary. In this matter, the character of minimum protection regime that the content of Directives 78/855/EEC, 82/891/EEC, 2005/56/EC, and the one now being incorporated has gives legitimacy to the maintenance in our law of the subjective expansion of protected creditors. But, following the Directive, while avoiding that the infringement of the duties incumbent on the company in case of legitimate opposition may affect the efficacy of the merger or spin-off, this Law expands the possibilities of action of creditors in cases where, despite the express prohibition of the law, the merger or spin-off is carried out without the provision of the necessary guarantees in favor of the opposer. The Law establishes, in fact, that, if the merger had been carried out despite the exercise, in time and form, of the right of opposition, without the provision of a guarantee by the company, the creditor may request the Commercial Registry that, by a marginal note on the registration made, the exercise of that right be recorded, allowing that, within the six months following the date of this marginal note, he may file a lawsuit before the Commercial Court against the absorbing company or against the new company requesting the provision of a guarantee for the payment of the credit.
III
Finally, the Law modifies the wording of the rules contained in Law 3/2009 relating to the right of withdrawal of shareholders in the case of cross-border merger and in the case of transfer of the registered office abroad. This Law recognizes the right of withdrawal to the shareholder in these two cases, but does so "in accordance with what is provided for limited liability companies." With the promulgation of the Consolidated Text of the Capital Companies Law, Law 2/1995, of March 23, on Limited Liability Companies, was repealed, generalizing the regime of the right of withdrawal contained therein. The reference contained in Law 3/2009, of April 3, to that repealed regime is, at least, equivocal, so, by an elementary imperative of legal certainty, it is essential to replace that reference, so that the regime is the one established in the current Title IX of the Capital Companies Law, which is where the exercise of that right is regulated when there is a legal or statutory cause for withdrawal.
Article first. Modification of the Consolidated Text of the Capital Companies Law, approved by Royal Legislative Decree 1/2010, of July 2.
Articles 11 bis, 69, and 173 are modified, and articles 11 ter and 11 quater and a new transitional provision are introduced into the Consolidated Text of the Capital Companies Law, approved by Royal Legislative Decree 1/2010, of July 2, in the following terms:
One. A new section, the 4th, is introduced in Chapter II of Title I, integrated by articles 11 bis, whose current wording is modified, 11 ter, and 11 quater:
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OFFICIAL STATE GAZETTE
No. 150 Saturday, June 23, 2012 Sec. I. Page 44683 "Section 4th. Website
Article 11 bis. Company website.

1. Capital companies may have a corporate website. This page will be mandatory for listed companies.
2. The creation of a corporate website must be agreed upon by the general meeting of the company. In the convening of the meeting, the creation of the website must appear expressly on the agenda of the meeting. Unless otherwise provided by the statutes, the modification, transfer, or suppression of the company's website will be the competence of the administrative body.
3. The agreement to create the website will be recorded in the sheet open to the company in the competent Commercial Registry and will be published in the "Official Bulletin of the Commercial Registry".
   The agreement to modify, transfer, or suppress the website will be recorded in the sheet open to the company in the competent Commercial Registry and will be published in the "Official Bulletin of the Commercial Registry", as well as on the website itself that has been agreed to be modified, transferred, or suppressed during the thirty days following from the insertion of the agreement.
   The publication of the company's website in the "Official Bulletin of the Commercial Registry" will be free.
   Until the publication of the website in the "Official Bulletin of the Commercial Registry" takes place, the insertions made by the company on the website will not have legal effects.
   The company statutes may require that, before these agreements are recorded in the sheet open to the company in the Commercial Registry, they be individually notified to each of the shareholders.
   Article 11 ter. Publications on the website.
4. The company will guarantee the security of the website, the authenticity of the documents published on that page, as well as free access to it with the possibility of downloading and printing what is inserted in it.
5. The burden of proof of the fact of the insertion of documents on the website and of the date on which that insertion took place will rest with the company.
6. The administrators have the duty to maintain what is inserted on the website during the term required by law, and will be jointly and severally liable among themselves and with the company towards shareholders, creditors, workers, and third parties for damages caused by the temporary interruption of access to that page, unless the interruption is due to force majeure or fortuitous event. To prove the maintenance of what is inserted during the term required by law, the declaration of the administrators will be sufficient, which may be rebutted by any interested party through any evidence admissible in Law.
7. If the interruption of access to the website is greater than two consecutive days or four alternating days, the general meeting that would have been convened to decide on the matter referred to by the document inserted on that page may not be held, unless the total number of days of effective publication is equal to or greater than the term required by law. In cases where the law requires the maintenance of the insertion after the general meeting has been held, if an interruption occurs, the insertion must be extended for a number of days equal to that for which access was interrupted.
   Article 11 quater. Communications by electronic means.
   Communications between the company and the shareholders, including the sending of documents, requests, and information, may be carried out by electronic means cve: BOE-A-2012-8406

OFFICIAL STATE GAZETTE
No. 150 Saturday, June 23, 2012 Sec. I. Page 44684 provided that such communications have been accepted by the shareholder. The company will enable, through the corporate website itself, the corresponding contact device with the company that allows proving the indisputable date of receipt as well as the content of the electronic messages exchanged between shareholders and the company."
Two. Three new letters c), d), and e) are added at the end of article 69, with the following wording:
"c) When in the constitution of a new company by merger or spin-off a report by an independent expert on the merger or spin-off project has been prepared. d) When the increase in share capital is carried out with the purpose of delivering the new shares or company participations to the shareholders of the absorbed or split-off company and an independent expert report on the merger or spin-off project has been prepared. e) When the increase in share capital is carried out with the purpose of delivering the new shares to the shareholders of the company that is the subject of a public takeover offer." Three. Article 173 is given a new wording, in the following terms:
"Article 173. Form of convening

1. The general meeting will be convened by means of an announcement published on the company's website if it has been created, registered, and published in the terms provided in article 11 bis. When the company has not agreed to create its website or it is not yet duly registered and published, the convening will be published in the "Official Bulletin of the Commercial Registry" and in one of the newspapers with the largest circulation in the province where the registered office is located.
2. In substitution of the convening form provided in the previous paragraph, the statutes may establish that the convening be carried out by any procedure of individual and written communication, which ensures the receipt of the announcement by all shareholders at the address designated for that purpose or that appears in the company's documentation. In the case of shareholders residing abroad, the statutes may provide that they will only be individually convened if they have designated a place in the national territory for notifications.
3. The statutes may establish additional publicity mechanisms to those provided by law and impose on the company the telematic management of an alert system for shareholders regarding convening announcements inserted on the company's website."
   Four. A new transitional provision is added with the following content:
   "Transitional Provision.
   The application of what is provided in article 348 bis of this Law is suspended until December 31, 2014."
   Article second. Modification of Law 3/2009, of April 3, on structural modifications of commercial companies.
   Articles 32, 34, 36, 39, 40, 42, 44, 45, 50, 51, 62, and 99 are modified, and article 78 bis is introduced into Law 3/2009, of April 3, on structural modifications of commercial companies, in the following terms:
   One. Article 32 is worded as follows:
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OFFICIAL STATE GAZETTE
No. 150 Saturday, June 23, 2012 Sec. I. Page 44685 "Article 32. Publicity.

1. The administrators are obliged to insert the common merger project on the website of each of the companies participating in the merger, without prejudice to being able to voluntarily deposit a copy of the common merger project in the Commercial Registry corresponding to each of the companies participating in it. The fact of the insertion of the merger project on the website will be published free of charge in the "Official Bulletin of the Commercial Registry", stating the website on which it appears and the date of the insertion. The insertion on the website of the project and the date thereof will be accredited by means of the certification of its content, sent to the corresponding Commercial Registry, and must be published in the "Official Bulletin of the Commercial Registry" within five days following the receipt of the last certification.
   The insertion on the website and the publication of this fact in the "Official Bulletin of the Commercial Registry" must be carried out at least one month in advance of the date scheduled for the holding of the general meeting that is to agree on the merger. The insertion of the merger project on the website must be maintained until the deadline for creditors to exercise their right of opposition to the merger expires.
2. If any of the companies participating in the merger lacks a website, the administrators are obliged to deposit a copy of the common merger project in the Commercial Registry in which it is registered. Once the deposit is made, the registrar will communicate to the central commercial registrar, for its immediate free publication in the "Official Bulletin of the Commercial Registry", the fact of the deposit and the date on which it took place.
3. The publication of the announcement convening the shareholders' meetings that are to resolve on the merger or the individual communication of that announcement to the shareholders may not be carried out before the publication of the insertion or the deposit of the project in the "Official Bulletin of the Commercial Registry"."
   Two. In article 34, the first paragraph of section 1 is modified, section 3 is suppressed, and sections 4 and 5 become sections 3 and 4, respectively, remaining worded as follows:
   "1. When any of the companies participating in the merger is a joint stock company or a limited partnership by shares, the administrators of each of the companies merging must request from the corresponding commercial registrar of the registered office the appointment of one or more independent experts and distinct, so that, separately, they issue a report on the common merger project.
   Notwithstanding the foregoing, the administrators of all the companies merging referred to in the previous section may ask the commercial registrar to appoint one or more experts for the preparation of a single report. The competence for the appointment will correspond to the commercial registrar of the registered office of the absorbing company or of that which appears in the common merger project as the registered office of the new company.
4. The appointed experts may obtain from the companies participating in the merger, without any limitation, all the information and documents they deem useful and proceed to all the verifications they consider necessary.
5. The report of the expert or experts will be divided into two parts: in the first, it must set out the methods followed by the administrators to establish the exchange ratio of the shares, participations, or quotas of the shareholders of the companies that are extinguished, explain if those methods are adequate, stating the values to which they lead, and, if they exist, the special valuation difficulties, and state the opinion on whether the exchange ratio is justified or not; and in the second, it must state the opinion on whether the assets contributed by the companies that are extinguished are equal to, at least, the capital of the new company or the amount of the increase in capital of the absorbing company.
6. The content of the expert or experts' report on the merger project will consist only of the second part when, in all the companies participating in the merger, all shareholders have agreed to
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