Legal Aspects of Company Formation and Governance
Subjective requirements of patentability
Shall be patentable every invention subceptible of industrial application maybe new and involved in an inventive step. Inventions are considered new if they don’t form part of the state of art (Estado de la técnica)
Which obligations have the patent owner?
The patent owner is required to exploit the patent invention, either by herself or through a person authorized by her. We introduce this reference as the LP (ley de patentes) acknowledges the existence of the so-called compulsory licenses. Therefore, as previously stated, the owner of a patent shall be obliged to work the patented invention by implementing the invention on Spanish territory and by marketing the results obtained to a sufficient extent as to satisfy the needs of the Spanish market.
Consequences of attributing legal personality to a company. Indicate when legal personality is acquired:
Once a legal entity is formed it is regarded in law as if it was an individual. The consequences are that they acquire the ability to possess property of all kinds, enter into contracts, assume obligations, and file civil law suits and for criminal charges; On the other hand legal entities can be sued in court, and prosecuted for criminal offences.
What is a sole member corporation/ sole proprietorship?
Sole members corporations may be incorporate as such (original sole proprietorship/unipersonalidad originaria) but it could also be the case of a company initially formed by two or more partners or shareholders in which all stakes or shares happen to be transferred to a sole party (supervened sole proprietorship/unipersonalidad sobrevenida) Arts.12 to 17/ LSC regulate this type of companies.
Types of company names according to Spanish law
The company name is important for the company itself and third parties. It cannot be misleading. For its formation, the company must apply to the Registro Mercantil Central. For that the co. will need negative certificate to check out whether or not the chosen name is already awarded to an already existing registered co. For the co. to fulfill its identifying role, the name has to be exclusive. Companies names may include members names, which is mandatory for partnerships. Misleading expressions are not allowed, No acronyms are allowed. The names of private limited co. shall include the words “Sociedad Limitada or Sociedad de Responsabilidad Limitada or S.L or S.R.L. Public limited companies Sociedad Anonima or S.A..
What the transformation of company is about?
By a transformation, a company adopts a different corporate status while conserving its legal personality. It is a change in the organization that members had originally agreed upon when the company was incorporate. Transformation is carried out due to member’s intention to adapt the legal structure of the company to their new economic needs and the most frequent are those referring to corporations. Company transformation shall necessarily be subject to approval by the general meeting. It has to be formalized in a deed and it shall not enter into effect until registered at the Business Registry.
Deed of incorporation (escritura de constitución) and by-laws (estatutos sociales)
Corporate By-laws are created for internal governance whereas articles of incorporation are required by law to be filed in order to create a corporation. Although By-laws are also required by law, they are a non-public document. Articles of Incorporation Have To be filed with a government registrar and be publicly available for review. Therefore, it is always desirable to keep Articles Filled To Minimum, while putting more provisions in the by-laws. Articles of Incorporation Typically Deal With The fundamental organizational aspects of the corporation. They Will Usually Include The Name of the corporation, stipulations about the amount of directors the corporation may have, the address of the corporation’s registered and another fundamental stipulations the incorporators feel are necessary.
By-laws will typically deal with us permanent and less fundamental aspects of the corporation’s organization and are adopted at meetings of the directors and shareholders of the corporation. Usually, a corporation will have a first meeting within months of its incorporation in order adopt a by-lawsuit may feel are important to have. By-laws will usually set out the requirements to be a director, where and when the directors and shareholders will meet, the remuneration of the company’s directors, officers, and accountant, stipulations around issuing shares and dividends, the corporation’s fiscal year end date, and any other important corporate governance provisions that the corporation wishes to be governed by.
Indicate cuales son los derechos minimos del socio en una SA o SRL
- Right to participate in the distribution of the company’s profits and net assets resulting from liquidation
- Right to preemptive assumption upon issue of quotas or pre-emptive subscription upon issue of new shares or bonds convertible into shares.
- Right to attend and vote in general meetings and to challenge company’s resolutions
- Information rights
¿Es libre la transmisión inter vivos de participaciones sociales?
Unless otherwise indicated in the bylaws, voluntary inter vivos transfers of private limited companies stakes may be freely transacted among members or in favour of members spouses, ascendants or descendants or companies belonging to the same group as the transferor. In other cases, transfers will be subject to the rules and limitations in the by laws or in the absence thereof, in LSC, which are the following rules
- A member proposing to transfer its quota must give written notice to directors, stating the number and characteristics of the quotas, the identity of the acquirer and the terms and conditions of the transfer.
- The transfer will be subject to the firm’s consent by a general meeting resolution. The agreement requires the ordinary majority foreseen in the by laws
- The company may only withhold its consent if it advises the transferor, through a notary, of the identity of one or more of its members or third parties that will acquire all the quota
Pledge of share and quotas
Unless otherwise provided in the articles, in the case of quotas and shares pledge the exercise of member’s rights corresponds to the owner. The pledgee must facilitate the exercise of these rights.
Que diferencia existe entre una junta ordinaria y extraordinaria
Ordinary meetings will be held during the first six months of each single financial year. Ordinary meetings agenda must refer to the approval by the meeting of directors managerial performance, the approval of the previous financial year accounts and the determination of the distribution of the company’s earnings. Other meetings with an agenda that doesn’t include the aforementioned issues shall be considered to be an extraordinary meeting.
¿A quien le corresponde convocar una junta general?
Companies directors must call general meetings when it is necessary for the firm’s interest, in the periods statutory provided and in those cases provided by the articles of association. They will also call general meetings on request of firm’s members whose stake amounts at least to five per cent. When the general meetings are not called within the statutory and articles terms, they may be called by the Juez de lo Mercantil on request of any member.
¿Cuanto dura el cargo de administrador en una SA? Y en un SRL?
Private limited liability companies directors may hold their offices indefinitely unless bylaws establish a specific term, in which event they may be re-elected on one or several occasions for terms of the same duration. Public limited liabilities companies directors shall hold their offices for the term established in the bylaws, which may not exceed six years and must be the same for all directors. Directors must be re-elected on one or several occasions for terms of the same duration.
¿Cuales pueden ser las modalidades de administracion en una sociedad de capital?
Companies governance may be entrusted to a sole director, several directors acting jointly or jointly and severally, or a board of directors.
Requisitos generales de una modificacion estatutoria
The modification is the competence of the general meeting. The modification proposal is prepared by the administrators or partners, and a supporting report is required if it is an S.A. The call must express its scope and the partners will have the right to examine the amending text. The modification agreement will be entered. In the S.A. 50% of the capital must be present and the favorable vote of 2/3 of those present in the capital stock must be present. Then it will be registered in the Mercantile Registry and published in the BORME
¿Cuales pueden ser las modalidades de reduccion de capital?
There are three modalities of capital reduction: the agreed by the company, the capital reduction because of loss set-off, the capital reduction for the purpose of returning contributions value.
¿En qué consiste la disolución de pleno?
– Full right: occurs after the time set by the statutes. If 1 year has passed since the capital reduction and the capital has not been transformed, or increased. – Legal and statutory causes: administrators must call the meeting within two months to adopt the dissolution resolution. – Agreement of the general meeting adopted with the requirements established for the modification of the bylaws.
Indicate some characteristics of the new limited private limited company
It’s a special type of the private limited company It is compound by the General meeting and sole or multipersonal administrative body The name is given by the letter: NLLC (New Limited Liability Co