Understanding Irregular, Void, and Null Companies in Law
Company Irregular
The LSA provides the step of forming a society irregular in two cases:
- When the articles of incorporation are verified not to include society.
- When 1 year has elapsed since the deed had been requested without registration.
Standards set for the art society irregular (Art. 16 LSA) are:
- Any member may urge the dissolution of the company and require prior clearance of the assets, the return of their contributions.
- If society still carries out activities, the rules of the partnership or civil society apply as the object.
- In the event that the company subsequently be placed irregularly and become SA, the provisions of Art. 15 LSA on the assumption by society of the acts and previous contracts and the subsequent release of liability of members, administrators, and representatives do not apply.
Society Void
The company has no or de facto is one whose contract is establishing affection by a defect of a substantive nature not recognized.
The causes of nullity of SA, regulated by Art. 34 LSA, are exhaustive in order to minimize and are as follows:
- Purpose illegal.
- Not meeting the minimum entries required for deeds and statutes.
- Inability of all the founding members.
- That does not attend the real intention of at least two founding members or founding partner in the case of sole proprietorship.
The special regime applicable to companies zero implies:
- Develops that the nullity ex nunc effect, so that the acts and contracts concluded by the company with third parties in good faith before the date of the declaration of invalidity shall be considered valid and effective.
- The declaration of invalidity operates as an automatic cause preventing dissolution of society continue its activity.
- It gives no society can remedy the cause of nullity if supported by the nature of the case.
Member Rights
Art. LSA 48.1 sets out the rights to at least correspond to the action without prejudice, that the LSA’s own rules provide for cases where certain rights are repealed. We can distinguish between political rights and economic rights.
A) Political Rights
1. Right to Attend the General Meeting
A member is entitled to attend the General Meeting as provided by law. The statutes may require, in respect of all shares, the possession of a minimum number to attend the Board that in no case exceed 1 per thousand of the capital.
2. Right to Request the Convening of the General Meeting
(Members representing 5% of capital).
3. Voting Rights
One share, as a rule, is equal to one vote. However, the Statute may modify this general rule indicating both the minimum number of shares you need a partner to exercise their right to vote, as the maximum number of votes they may cast a shareholder or companies of the same group.
Statutes can also set the issue of shares without voting rights for a nominal amount not exceeding half of the capital paid for preferred shares is subject to a special legal regime. So, in compensation for the abolition of voting rights embodied primarily confer economic privileges such as:
- Right to receive a minimum dividend (fixed or variable) ensure not only the minimum dividend corresponding to the common stock.
- Entitled to share liquidation preference to other shareholders.
- Right not to be affected by reductions in capital losses, until the reduction exceeds the nominal value of the remaining shares.
If the company fails to comply with these rights assigned to non-voting shares, he regains his right to vote. Therefore, the right to vote is always latent.
4. Right to Information
The right to information is configured as non-derogable and instrumental to the exercise of other rights, including the right to vote.
5. The Right to Contest the Social Arrangements
(See lesson 7.1).
6. Right to Exercise Social Responsibility Action Against Administrators
B) Economic Rights
7. Right to Participation in Social Benefits
This is the right of the partner not to be excluded from dividend plus the right to an annual distribution of dividends, provided that the statutes have not provided otherwise. The right partner with the receipt of dividends shall lapse five days from the day appointed to begin their recovery.
8. Right to Participate in the Assets Resulting from the Settlement
The division of assets resulting from the liquidation will be made, as a rule, in proportion to the nominal value of the shares.
C) Human Mixed Rights
9. Right-Emption
The right-emption is that increases in capital by issuing new shares to former shareholders and convertible debenture holders may exercise within the time allowed by the administrators, the right to subscribe a number of new shares in proportion to the nominal value of shares held, or which correspond to the convertible bond holders to exercise the option at the time of conversion. This period can never be less than 15 days after publication of the notice of availability in the BORME the case of listed companies and 1 month in other cases. The preemptive right does not arise if the capital increase is made entirely from reserves because in this case there is no subscription of new shares, but an allocation of these to existing shareholders for free and in proportion to the nominal value of the shares or convertible bonds they hold.
Ancillary Benefits
The SA’s contribution can only be in money (cash contributions) or assets capable of economic assessment (for cash), but not in work or services. However, in the Constitution can be agreed that any/or all partners will be providing services to society. This service, which can never serve to receive social actions are articulated through the instrument of incidental services. These benefits consist of the performance of certain services by the society members are remunerated with a share in profits or otherwise. The statutes have to detail your system, expressing its contents, actions that carry with them an obligation to do it and the consequences for noncompliance.