Countdown for complying to reform of Joint-stock Companies Law

Countdown for complying to reform of Joint-stock Companies Law

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Evolutiza Lawyers & Tax Advisors exposes the news on reform of Joint-Stock Companies for improvement of governance

The reform provides a series of innovations for companies in general and in listed stock companies, fixing the period for adapting the stipulations and by laws until next general meeting.

The content of the reform is based on four basic aspects, as detailed below,

1) Improving the competence of the shareholder meeting and shareholder rights

2) Composition and liability regime for company management bodies

3) Remuneration of the Board

4) Reporting requirement in social accounts on average payment period to suppliers

With the amendments introduced what is being sought is to provide greater security to the stability of enterprises, while providing more easily to the most minority shareholders.

Furthermore, we highlight the most relevant points as follows:

In case of listed companies, the most important is the reduction percentage required to exercise the minimum rights passing these out from 5% to 3%. Reducing the maximum number of shares that could be required to attend the meeting from 1 per thousand to 1,000 shares. And finally, entities acting on behalf of several people may divide and delegate vote, such intended those foreing partners or investors.

Specially, regarding the responsibility of the Board, the scope of this expands beyond the claim for damages, including the return of unfair enrichment. The filing of the corporate liability action is facilitated by reducing the necessary shares for exercising (from 5 to 3% in listed) and allowing direct interposition (without waiting for the meeting) in case of breach of the duty of loyalty.

Finally, in order to increase the protection of providers, companies are obliged to publish in the statement to the annual accounts the average period of payment to suppliers. Companies which are not stock-listed and abridged financial statements must present also this information on their website, if they got one.

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