• It replaces the current Commercial Code that was promulgated in 1885
  • It revolves around the concept of the market, an area in which legal-private relationships are established between the protagonists of the trafficking of goods and services
  • Regulates institutions that did not have specific rules such as the company and the businesses on it or contractual modalities that are currently very widespread
  • It compiles the numerous laws that have been enacted on the market for almost 130 years, such as some types of contracts and the rules on accounting for entrepreneurs
  • Includes 1,726 articles divided into a preliminary title and seven books
  • It will contribute to increasing legal certainty by clearly delimiting commercial legislation that is the exclusive competence of the State to reinforce market unity.
  • The General Codification Commission has worked on the text since 2006

The Council of Ministers, at the proposal of the Minister of Justice, Alberto Ruiz-Gallardón, and the Minister of Economy, Luis de Guindos, approved today the Draft Law of the Mercantile Code which will replace the Commercial Code that has been in force since 1885. The text, in which the General Codification Commission has worked since 2006, is considered essential to make market unity effective in the legal-private sphere through commercial legislation that the Constitution attributes to the State.

The promulgation of a Commercial Code that ends the existing dispersion in the matter was a historical claim of economic operators and will contribute to the recovery of economic activity by increasing legal certainty. This will be achieved through update of existing standards, the regulation of realities that did not have their own and the coordination of the entire normative set.

The Draft Law of the Mercantile Code revolves around the concept of market, understood as the area in which they are entered into by the so-called market operators (companies, entrepreneurs, professionals) legal-private relations, always respecting the consumer protection regulations, especially the revised text of the General Law for the Defense of Consumers and Users.

The Code regulates matters that lacked applicable regulations. It is the case of company and operations rules or business on it and representation. Also included are several articles on industrial property and different types of contracts, such as supply, mediation, works, commercial services, operations on intangible assets, electronic services, banking and financing contracts.

For redact all 1,726 items The text approved today by the Council of Ministers consists of the experience accumulated by the different operators and the laws of the countries around us, as well as the work of UNCITRAL and UNIDROIT, given the importance of international trade.

The Mercantile Code is structured in a preliminary title, in which the mercantile matter is delimited, and seven books. The first delimits the legal regime of the company and the responsibility of the employer, as well as the Mercantile Registry. The next one focuses on commercial companies. The third regulates competition law and industrial property. The of commercial obligations and contracts in general It is the fourth and is complemented by the fifth, referring to contracts in particular. The sixth is that of securities and payment and credit instruments and the seventh establishes a general statute of limitations and expiration of commercial obligations.

Preliminary title, the delimitation of commercial matters

The market is conceived as the area where offers and demands for goods and services intersect through legal-private relationships that are subject to special regulation. The protagonists of this traffic are classified into producers of goods and service providers -which are the market operators subject to the Code- and consumers.

From there on Mercantile statute is configured as the set of rules that establish rights and obligations for entrepreneurs depending on the legal ownership of a company and the activity it performs for the market. It includes the rules on the private-legal regime of the company, responsibility and representation of its owner, commercial register and accounting, as well as, as a whole, the law of commercial companies.

First book: the entrepreneur and the company

The first book includes the regulation of companies, the representation of entrepreneurs, business on companies and the Commercial Registry.

The concept entrepreneur it is understood in a broad sense. It covers agriculturalists and artisans, but people who carry out intellectual activities are also considered market operators: liberal, scientific and artistic whenever their goods or services are destined for the market.. It includes all legal entities that carry out activities provided for in the Code (such as associations and foundations) and entities without legal personality.

Regulates the general requirements of the entrepreneur's capacity for the exercise of his activity, in his own name or through his legal representatives. Non-emancipated minors and people with disabilities may, through their legal representatives, continue the activity of the company that they receive by donation, inheritance or legacy, or that they were exercising when the determining event of their disability occurred.

It is also regulated the economic liability of the entrepreneur with limited liability, which includes the exclusion of his habitual residence of responsibility for carrying out economic activities, as provided in Law 14/2013, of September 27, Supporting Entrepreneurs and their Internationalization.

The commercial representation includes the entrepreneur's assistants (employees) and general and special proxies, depending on whether their powers extend to all activities or only to certain acts of company traffic.

The company is an organization of diverse elements from which a new value results: goodwill. The real estate and facilities in which the entrepreneur carries out his activity are defined as establishments, and it is distinguished the main (center of operations developed) of the branches (endowed with permanent representation and management autonomy) and others secondary establishments or accessories.

One of the novelties included in the Commercial Code occurs in bankruptcy proceedings, when regulate the transfer of the company as a whole, and, unless otherwise agreed or lack of conformity of the counterparty, will include the assignment of contracts concluded in the exercise of the business activity, the assignment of credits generated in that exercise and the assumption by the acquirer of the debts resulting from the accounting and business documentation, of which the transferor will respond jointly and severally.

Regulation of Mercantile registry incorporates technological means, such as the central electronic platform, which will allow public access to inquiries, and electronic support for the individual sheet in the keeping system, the proof of the inscribable document or the issuance of certifications or informative notes.

Second book: of commercial companies

The second book of the Draft Law of the Mercantile Code regulates general provisions applicable to all commercial companies, to differentiate between the two main categories of companies, those of individuals and those of capital. In each of them, common and own or special provisions of a specific type are distinguished, such as limited partnerships, in those of individuals, and limited and public limited companies, in those of capital. These also include the rules regarding the European corporation domiciled in Spain, the issuance of bonds and the limited partnership for shares.

Along with this basic systematic framework, a set of matters are ordered, such as the annual accounts, the modification of the statutes, the structural modifications, the separation and exclusion of partners. The dissolution, liquidation and extinction of commercial companies, listed companies and business unions are also regulated.

Among the general provisions are the establishment of the principle of equal treatment of partners under identical conditions, the regulation of the corporate website or the electronic domain of the company. Particular care has been taken in regulating the ways of adopting corporate agreements (including their challenge as a minority right) and the administration of the company. On this last question, the basic rules on the capacity to be an administrator, organic competence and power of representation have been incorporated.

In the regulation of capital companies, the order of preference in the practical use of corporate types of capital has been reversed in favor of the limited company. In addition, many of the regulatory standards will apply interchangeably to both the public limited company and the limited company.

The intention is to a greater correspondence between the capital of the company and the chosen company structure. Therefore, for the limited company, the minimum share capital is maintained at 3,000 euros, while in the limited company it has been doubled, 120,000 euros.

The new techniques of telematic and simplified constitution are studied in depth, and incorporates the special assumption of a limited company with capital below the legal minimum, recently regulated in our law by the law to support entrepreneurs.

In order to solve the difficulties to proceed to the extinction of the liquidated company in case of lack of assets, a more agile procedure has been established that allows (still in the corporate sphere -not bankruptcy and, therefore, with lower costs-), to verify if there are possibilities of reimbursement of assets or coverage of the deficit that justify a declaration of insolvency or if, on the contrary, it should proceed to the extinction and cancellation of the company's registry.

The differential treatment of listed companies is maintained established in the consolidated text of the 2010 Capital Companies Law with the proposals made by the Committee of Experts on Corporate Governance. In other words, it concentrates the norms that correspond to company law and addresses such significant matters as the prohibition of voting limitations, the right to know the identity of the shareholders, the information prior to the general meeting, the right to present new proposals for agreement and specialties in the field of information right. Part of these provisions are generally applicable to capital companies.

Coordination with the rules of good governance approved by the Council of Ministers a few weeks ago has resulted, among other provisions, in giving a boost to the principle of balanced presence between women and men on the boards of directors of listed companies.

It also deals with shareholders' associations and forums, the rules of the public representation request, the conflict of interest, the classes of directors, the requirements for the accumulation of positions and their duration, the qualification of the independent director, internal committees of the board, remuneration specialties or special corporate information instruments.

The regime of company unions, economic interest groups and temporary company unions acquires regulatory relevance in this preliminary draft.. The concept of group of companies is based on the control criterion. That is, by subordination or hierarchical structure, with a dominant company and dependent or dominated companies. However, the existence of coordination groups in which two or more independent companies operate under a single direction is not disregarded.

Third book: of competition and industrial property law

The preliminary draft includes the regulation of competition in the market, including for the first time certain regulations governing business activity in the market –In coordination with Law 15/2007, of July 3, on Defense of Competition, to which they refer-, and rules of conduct aimed at businessmen and professionals, but also at any entity that, like the Administration, participates in the market. It also incorporates the rules on actions and on some aspects of civil procedure that are currently contained in Law 3/1991, of January 10, on Unfair Competition.

On the other hand, it highlights the incorporation in the preliminary draft law approved today of industrial property standards, as an indispensable instrument for the operation of the market economy based on the principle of free competition.

Book four: obligations and commercial contracts in general

The need to modernize this sector of commercial activity has led to the preliminary draft establishing general rules to be applied to commercial obligations and contracts. As a general rule they have operative effectiveness and they will only be imperative in cases where this is expressly provided. They are inspired by the United Nations Convention on Contracts for the Sale of Goods of April 11, 1980, the Principles on International Commercial Contracts for the Unification of Private Law (UNIDROIT) and the work of the Landó Commission on Law European contract.

These provisions regulate the different phases of the life of the contract, from the pre-contractual phase (not contemplated in our current positive law) to the termination and breach of the contract, through perfection, modification, interpretation and compliance with it.

The regulation of the electronic contracting, which enshrines the principles of functional equivalence, technological neutrality, freedom of agreement and good faith. It is also regulated contracting in public auctions and contracting through automatic machines, as special forms of contracting to which they resort with certain frequency in certain sectors of economic traffic.

As important legal aspects of modern contracting, the Mercantile Code also includes the provisions referring to the General Contracting Conditions and the Confidentiality and Exclusive Clauses.

Book five: of commercial contracts in particular

This book includes a large number of commercial contracts that are commonly concluded in economic traffic to promote legal certainty through the establishment of a previously known legal regime. However, some are regulated for the first time at the legislative level, as the financial ones or those of provision of computer services.

In addition, the possibility of considering as commercial, under the principle of freedom of covenants, other contractual types that occur in the market is maintained. The rules on obligations and commercial contracts in general provided for in the fourth Book of the preliminary draft will be applied to these atypical contracts.

Sixth book: of securities and payment and credit instruments

Book six incorporates the regulation of securities and payment and credit instruments as a general legal category. It makes a generalization of the rules contained in the Exchange and Check Law, while taking into account the progressive substitution of paper support for computer support, a circumstance that affects essential aspects such as legitimation for possession of the document or transmission of the annotated right.

The text responds to a unitary concept of the securities in attention to the economic function that they fulfill, which is to facilitate and protect the circulation of the right or documented rights. In attention to the form of circulation of the securities, the classic distinction is followed between bearer titles, made-to-order titles and nominative titles.

The modernization that is operated in the legal regime of the check, the promissory note and the bill of exchange, is also incorporated into the invoice accepted. Simplification of this regime is carried out by deleting copies of bills of exchange and eliminating the figure of the intervention. And, without prejudice to the specialties, a single legal regime of the release, transmission, guarantee, payment and non-payment of these titles is foreseen.

For its part, the regime of securities It is made from two elements: on the one hand, a formal element, the serial issue and, on the other hand, the use of the movable value to capture the investment by virtue of an issue business.

Also includes this book for the first time the regulation of cards, whether payment or short-term credit. The emphasis is on the card issuer's obligations in order to establish the guarantees required by the fact that often one of the contracting parties is not a professional.

Seventh book: the prescription and the expiration of commercial obligations

Finally, the seventh book includes the rules related to prescription and expiration in the regulation of which the most modern positions of both national and international traffic regulations have been taken into account.

So it refers to the prescription, a general regime has been established, applicable unless there is an express provision to the contrary, which foresees a single prescription period reduced to four years. To compute the deadlines, the special assumptions of periodic and accessory benefits will be taken into account.

Special importance it has the regulation that is made of the suspension of the prescription, its cause and its effects, as well as the novelties introduced in its interruption. Unlike what happens in the law still in force, I know recognizes the interruption of the prescription by extrajudicial request only once to avoid that a credit with indefinite duration can be maintained, through successive extrajudicial requests. The effects of the interruption and its application to joint and several co-debtors of an indivisible debt are also established.

It is also the first time that the expiration in its fundamental aspects is regulated in general: effects, validity or nullity of the pacts on it and determination of when its application ex officio proceeds.

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