New Modifications to the Commercial Code
Contributed by Carles Barraza
31 January, 2013
Contributed by Carles Barraza
Law No. 85 of November 22, 2012, modifies and adds articles to the Commercial Code in order to establish the separation (or split) as a form of business reorganization and the reactivation of companies whose dissolution has been voluntary. Such law was approved recently and it was published in the Official Gazette No. 27, 172 of November 28, 2012.
Chapter IX-A, of the Separation of companies is added, it stipulates the following:
A commercial company of any type or nature may separate itself through the division of all or part of its equity and its transference to one or more companies already set up or to the creation of new companies, denominated beneficiaries, which have the same associates or shareholders of the separated company or which will have such company as its associate or shareholder. Such separation will be approved through a minute and it must be converted into a public deed and registered in the Public Registry, so that it may have efficacy in relation to third parties.
In such minute the associates or shareholders of the separated company may accord the following:
- The total or partial transference of either individualized assets or assets en bloc.
- The regime of limitation of liability of the separated company and of the beneficiary company or companies.
- The transference or not transference of the liabilities of the separated company.
- The transference of the participation quotas or of the shares to the beneficiary companies.
- The quantity of participation quotas or of shares corresponding to each associate or shareholder of the separated company, in proportion to his/her social share in such company.
- The approval of the social contract of the company or of the new companies to be set up.
No associate or shareholder of the separated company may lose his/her capacity as such due to the separation, unless (s)he voluntarily allows it.
In the separation, the company or the beneficiary companies will become responsible for the corresponding obligations in accordance to the terms of the separation and they will acquire such rights, privileges and obligations that are inherent to the part of the equity that has been transferred to them from the time in which they were acquired by the separated company.
Likewise, the beneficiary company will be liable in solidum (i.e. each obligated entity will be individually liable for the whole) in relation to the creditors of the separated company due to noncompliance of its credits, if the transference of the equity of such company is detrimental to its creditors.
Reactivation of companies by voluntary dissolution
When a company has been dissolved by the will of its associates in accordance with the document of its constitution or the laws that regulate it, it may keep its legal capacity during the period of the liquidation of its equity, only for such specific purposes as: to collect credits and to settle liabilities. The liquidation will be concluded when its associates or shareholders have distributed among themselves their corresponding allotment from the capital (of a corporation) or assets (of a partnership), consequently the company will not be able to carry out new businesses or actions of commerce during its liquidation.
This law sets forth important points on the reactivation of the companies dissolved, such as:
- The dissolved companies may be reactivated at any time before the end of their liquidation.
- The reactivation will be approved by a majority decision of the members, associates or shareholders of the company; it will be adopted in a general meeting specially convened for such purpose or as stipulated in its social contract.
- It may be reactivated by a majority decision of the members, associates or shareholders whose process of liquidation has concluded, in the case that, after having ended such process, there appeared assets of the company that had not been liquidated.
- The reactivation will cause the termination of the process of liquidation of the company, the termination of the limitation to carry out new businesses and the continuation of its legal standing.
- The company may continue with its legal and contractual relations that had not ended before its reactivation.
- The liquidators may be removed or replaced at any time by virtue of the decision adopted in a general meeting of shareholders or associates; in the case that the liquidator has been appointed by a competent judge, his/her removal must be decreed by an order of such judge, at the request of some of the associates and for well founded reasons.
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