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Board of Governance is resonsible for operations with Essential Business Assets

In Spain, the new law is approved. Law 31/2014, of 3 December, approving the Capital Companies Act (LSC) for the improvement of corporate governance changes, indicating that it is for the general meeting deliberate and resolve on the acquisition, disposal or the contribution to society other essential assets. The essential character of the asset is presumed when the amount of the transaction exceeds 25% of the value of the assets listed in the latest approved balance sheet.

The new power of the General Meeting, ie decide on "the acquisition, disposal or contribution to another company of essential assets" requires a distinction in the legal business conducted by the board (usually acquisition / disposal of assets) if it is "essential" assets -Competence of the General- Board or administration-organ -Competence without the legislature required that assessed so it is an "essential asset." Only establishes a presumption, but does not clarify who is competent to decide on the character of "essential" asset, or whether the possible lack of agreement affects third parties.
Operations comprising

What is to be in new Law:

  • Acquisition of core assets, provided that the transferor is a company,
  • Disposal of key assets, provided that the purchaser is another company, and
  • Essential contribution to another company assets.

Presumption of core assets

The Act does not define the essential assets only establishes a presumption about the essential nature of the assets according to their economic value, "the essential character of the asset is presumed when the amount of the transaction exceeds twenty five percent of the value of the assets listed in the last balance sheet approved "

It is a rebuttable presumption (rebutted), so that may have assets exceeding 25% and non-essential, and vice versa, assets value less than 25% and yet are essential.

The presumption means that:

- If the asset sold or acquired exceeds 25%, it will be the test administrator in case of complaint, that there is an essential asset (eg a society that alienates property whose value exceeds 25% of the value of assets, but whose purpose is precisely the sale of the properties that form part of its assets, in the case of an operation so normal course of business, of competence of the governing body).

- However, if the asset disposed does not exceed 25%, but is considered by the shareholders or creditors, which is an essential for society active must be them claiming responsibility the management body who prove the essential character of the asset (eg society that alienates a patent or an administrative concession, whose value does not exceed 25% of assets, but without which it can not develop the social object).

If you have questions about whether a purchase or sale is not "essential", avoid risks and seek authorization from partners to do it. For this purpose, convene a meeting at which he is authorized to do the operation and the conditions of this (price of purchase or sale, term to be done, payment) are established. If it does not and that are essential assets, members can be held accountable (for example, if the operation harms society).
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