Changes to the Spanish Corporate ActApr 09, 2015
On December 3, 2014, Spain went ahead and amended the full terms of the Spanish Corporate Act. Determined as “Law 31/2014”, which will primarily deal with board meetings and shareholder operations, this declaration looks to improve upon several areas of governances located in Spain. In simple terms, this amendment to Spanish corporate law deals with more focus being placed on board meetings and shareholding contributions, so that the corporate properties will be more closely connected. This law is also known as Ley de Sociedades de Capital, which is usually shortened as LSC.
Board meetings will now have to be held once per quarter (four times a year), instead of old practices that only required an annual meeting. While the function of these meetings, as well as the topics covered in these meetings are not stated in the amendment, with time more specifics could be granted for Law 31/2014. Board members that have a conflict of interest with the program or concept will have to be withheld from voting, as impartially is a must for corporate function. This law reinforces this, by barring anyone with a personal subjective and biased view on the topic from having a registered vote. Contracts also need to be drafted for any new board members, in which the contract details their powers and functions in the company. Contracts also need to be agreed upon by a majority vote, so as their isn't a opinionative vote for a favored member. This better equals out all contracts that are heralded by the board meetings.
Shareholders are also affected by this amendment, as any conflicts that appear in the corporation, like the hiring of a party and the firing of another, will need to be dealt with accordingly. With this law, the implement looks to be found in a majority vote if a qualifying vote is not necessary. Shareholders must also, with the new law amendment, dispose of any assets that value over 25% value. This is out of the company, so it is coming out of the company’s asset value. Finally, it should be noted that this amendment is not out to destroy or hurt company finances. Instead, it still allows for companies to keep their bylaws, it is just trying to have a functioning and equalized company system. Companies will not need to edit their bylaws, at least not at this time they will not.