Basic Company/Corporate Law Vocabulary…………………………………………………………… 2
Corporate Law Terminology in the US and in England/Wales………………………………….. 4
The Scope of Business Law…………………………………………………………………………………. 5
What do Business Lawyers Do?…………………………………………………………………………… 6
Forms of Doing Business in the US and in England/Wales………………………………………. 8
10 FAQs—Acquiring a Business in Spain……………………………………………………………. 11
Sample Articles of Incorporation………………………………………………………………………… 13
Sample Bylaws…………………………………………………………………………………………………. 15
The Content of Business Law in Spain………………………………………………………………… 20
Table-Spanish Business Vehicles………………………………………………………………………… 21
NOTE: In order to understand the different types of business vehicles that are used in England and the United States, you must first have a very clear knowledge of the basic characteristics and major differences between these Spanish business forms:
- el empresario individual
- la sociedad (regular) colectiva
- la sociedad comanditaria (o) en comandita
- la sociedad en comandita por acciones
- la sociedad (de responsabilidad) limitada
- la sociedad anónima
If you need to, please review the appropriate articles in the Código de Comercio and in the Ley de Sociedades de Capital (2010)
Basic Company/Corporate Law Vocabulary
Company Law; Corporate/Corporation Law
- sole proprietor
- sole trader
- DBA “doing business as…”
- partner (general partner; limited partner)
- partnership (general partnership; limited partnership
- partnership agreement/articles of partnership
- partnership assets
- partnership debts
- dissolution of partnership
- charitable corporation
- nonprofit corporation
- professional corporation
- close corporation/closely-held corporation/closed corporation/family corporation
- de jure corporation
- de facto corporation
- domestic corporation
- foreign corporation
- parent company
- (wholly-owned) subsidiary
- certificate of incorporation
- articles of incorporation/memorandum of association
- bylaws/articles of incorporation
- business name
- corporate domicile
- corporate purpose; company’s objects
- merger/consolidation of corporations
- dissolution of corporations
- winding up
- capital stock; share capital
- par value/face value
- stock certificate
- book-entry system; uncertificated shares
- stock/share ledger and transfer books
- common stock/ordinary shares
- preferred stock/preference shares
- share issue; to issue shares
- outstanding stock
- stockholders/shareholders meeting
- annual general meeting (AGM)
- minutes of the meeting
- minute/minutes book
- Securities Exchange Commission (SEC)
- insider; insider information; insider trading
- over-the-counter market
annual stockholders/shareholders meeting
- to vote by proxy; proxy vote
board of directors
- directors; board members; members of the board
- chairman of the board
- corporate officers
- chief executive officer (CEO)
- annual report; annual statement
- fiduciary duty
- piercing the corporate veil
Corporate Law Terminology in the US and in England/Wales
|closest Spanish equivalent
|limited liability company (LLC)
|private limited company (Ltd.)
|sociedad de responsabilidad limitada (S.L.)
|public limited company (plc)
|sociedad anónima (S.A.) (cotizada)
|articles of incorporation
|memorandum of association
|acta constitutiva; escritura de constitución
|articles (of association)
|annual stockholders’/ shareholder’s meeting
|annual general meeting (AGM)
|junta general de accionistas
|special stockholders’/ shareholders meeting
|extraordinary general meeting
|piercing the corporate veil
|lifting the corporate veil
|levantamiento del velo corporativo
The Scope of Business Law
As an introduction to the basic vocabulary of business law in English, here is the Table of Contents of a standard US textbook on business law. Compare this to the areas of law studied in “Derecho Mercantil”. What areas are different? What does this indicate about the way law is organized in civil law and common law systems?
UNIT 1. THE LEGAL ENVIRONMENT OF BUSINESS.
- The Legal Environment. 2. Constitutional Law. 3. Courts and Alternative Dispute Resolution. 4. Torts and Cyber Crimes. 5. Intellectual Property. 6. Criminal Law and Cyber Crimes. 7. Ethics and Professional Responsibility.
UNIT 2. CONTRACTS. 8. Nature and Classification. 9. Agreement and Consideration. 10. Capacity and Legality. 11. Defenses to Contract Enforceability. 12. Third Party Rights and Discharge. 13. Breach and Remedies. 14. E-Contracts.
UNIT 3. SALES AND LEASE CONTRACTS. 15. The Formation of Sales and Lease Contracts. 16.Title and Risk of Loss. 17. Performance and Breach of Sales and Lease Contracts. 18. Warranties and Product Liability.
UNIT 4. NEGOTIABLE INSTRUMENTS. 19. Negotiability and Transferability. 20. Rights and Liabilities of Parties. 21. Checks, the Banking System, and E-Money.
UNIT 5. DEBTOR-CREDITOR RELATIONSHIPS. 22. Secured Transactions. 23. Creditors’ Rights and Bankruptcy.
UNIT 6. BUSINESS ORGANIZATIONS. 24. Agency. 25. Sole Proprietorships and Private Franchises. 26. Partnerships. 27. Limited Liability Companies and Special Business Forms. 28. Corporate Formation and Financing. 29. Corporate Directors, Officers, and Shareholders. 30. Corporate Merger, Consolidation, and Termination. 31. Investor Protection and Online Securities Offerings.
UNIT 7. GOVERNMENT REGULATION. 32. Antitrust. 33. Consumer and Environmental Law. 34. Labor and Employment Law. 35. Employment Discrimination.
UNIT 8. PROPERTY AND ITS PROTECTION. 36. Personal Property and Bailments. 37. Real Property and Landlord-Tenant Law. 38. Insurance, Wills, and Trusts.
UNIT 9. THE INTERNATIONAL LEGAL ENVIRONMENT. 39. International Law in a Global Economy.
What do Business Lawyers Do?
Business lawyers often develop expertise in one or more specialized areas of practice, such as those described below. The varied and broad range of practice opportunities available to business lawyers cannot be conveyed fully in the space available here. However, these are some of the specialties for which our graduates can prepare themselves through the study of business and commercial law.
Corporate and Securities Law
The practices of corporate and securities lawyers range from representing a large corporation in a high-profile takeover battle played out on the front pages of The Wall Street Journal to helping an entrepreneur set up a local hardware store. Lawyers who practice in this area assist clients in forming business entities, structuring the relationships among investors and managers, raising capital through public or private offerings of securities or by selling assets, and resolving disputes related to management of business entities or the sale of securities.
The sale of a piece of machinery is a commercial transaction. So too is the sale of a National Football League franchise. Commercial lawyers are concerned primarily with the transfer of goods, services, or other value from one business entity to another. Commercial lawyers may work in-house for a business, as sole practitioners, or in law firms of all sizes. Some commercial lawyers practice with federal, state, or local government entities. Commercial lawyers structure and document transactions. They can organize the financing that brings a transaction to fruition and can sort out competing claims of creditors when transactions do not go as planned. Negotiation, counseling, and drafting skills are critical to the commercial law practitioner.
Intellectual Property Law
Intellectual property lawyers assist clients in securing and protecting the client’s intellectual property assets. At its core, intellectual property law involves the dynamic fields of copyright, trademark, and patent law. But an intellectual property practice can also include the areas of unfair competition, trade secret law, misappropriation, and rights of publicity. Intellectual property law is quickly becoming a critical component to every business law firm’s practice.
International Business Law
This practice area is in many ways an extension of all other facets of business law. A modern business lawyer is unlikely to complete his or her career without encountering problems involving international business law. A moment’s reflection on the origins of many products seen on store shelves or the ultimate destination of locally produced items reveals the international dimension of daily life, which can add a layer of legal and cultural complexity to many business transactions. In addition to U.S. export-import laws, international business law involves a consideration of issues of foreign law and international trade organizations.
Labor and Employment Law
A labor or employment law specialist focuses on the relationship between the worker, the employer, and the workplace. The traditional domain of labor lawyers is representing management or workers in union-related negotiations and disputes. In nonunion environments, the broader field of employment law plays a central role in the business community and in most individuals’ lives. The law governing these relationships includes state and federal statutes barring invidious discrimination on grounds such as race, color, national origin, religion, age, disability, and sex. Statutes also regulate other aspects of the workplace, including family leave, pension and medical plans, wages and overtime pay, safety, and noncompetition agreements. Common law contract doctrines and business torts involving wrongful discharge, privacy, and trade secrets round out this complex picture. Because of the multifaceted nature of this field, employment lawyers have a wide range of practice opportunities.
Real Estate Law
This field touches all aspects of the sale, financing, and development of land. Consider, for instance, the development of a shopping center, a project with many stages and involving many players. The developer who acquires the raw land, the sellers of the land, architects hired to design the shopping center, the contractor who builds it, the bank that finances the construction, and the retailers who lease or purchase space in the new shopping center all are likely to need the expertise of a real estate practitioner.
A tax lawyer helps clients plan transactions to minimize federal, state, and local taxes. In addition to dealing with general income tax issues, tax lawyers may specialize in distinct problems such as pensions and estate planning. They may advise clients about how to report completed transactions on tax returns or may represent clients in controversies with the Internal Revenue Service and state and local revenue agencies, both at the administrative level and in court.
General Business Litigation
Attorneys who practice business law, regardless of specialty, tend to be classified either as transactional lawyers or as business litigators, though many attorneys do some of both. A business litigator represents firms as they resolve business disputes in the courts. Some become experts in alternative dispute resolution methods, such as arbitration or mediation. Some business litigators are in court daily; others spend much of their time working on cases involving complex pretrial questions, where the brief writer’s art is key.
(From the website of the Lewis & Clark Law School, Portland, Oregon. http://www.lclark.edu/dept/blaw/practice.html)
Forms of Doing Business in the US and in England/Wales
(The following information is a simplified overview of the forms of doing business in the US and England, and is intended to provide you with the appropriate vocabulary to enable you to explain the features of Spanish business forms to a potential English-speaking client.)
- The owner is known as a “sole proprietor” in the US and a “sole trader” in England.
- This is the simplest business structure, owned by one person who has absolute authority in all management decisions and assumes all responsibility and unlimited liability for the business.
- In the US, it can be formed by finding a location and opening the door for business, although some fees to register a business name and obtain licenses for certain activities may be required. If not operating under the owner’s own name, some states require the proprietor to file a “Doing Business As” form.
- There are no minimum capital or share payment requirements.
- The business may be terminated by sale, insolvency or voluntary cessation of business, or upon the incapacitation or death of the proprietor.
- It is the easiest type of business to set up.
- It is the most flexible business form, since the proprietor has absolute authority.
- There is no separate income tax; business profits and losses are a part of personal income, and losses and business expenses are tax deductible.
- The owner assumes unlimited personal liability for debts and lawsuits.
- The owner’s illness or death can destabilize the business.
- The owner has a limited ability to raise capital.
GENERAL PARTNERSHIP / LIMITED PARTNERSHIP
- Two or more people agree to share ownership, management responsibilities and liability for the business.
- It is created by a Partnership Agreement
- General partners have unlimited, joint and several liability for all debts of the partnership. Limited partners are liable only for their contributions to the business.
- Profits and losses are shared equally, unless otherwise stipulated in the Partnership Agreement.
- General partners have equal votes in the management of the business, unless otherwise stipulated in the Partnership Agreement. Limited partners have no management rights.
- Each partner’s share of the profits is part of his personal income. There is no separate taxation on partnerships.
- A partnership may be terminated according to the terms of the Partnership Agreement, by subsequent agreement of the partners, by incapacity or death of one or more of the partners, or by sale, insolvency or voluntary cessation of the business.
- In many US states a distinction is made between a limited partnership (LP) and a limited liability partnership (LLP) that allows partners to take a more active role in managing the business without exposing themselves to personal liability for the acts of others beyond the extent of their investments. Many US law firms operate as LLPs.
- Having partners provides additional sources of capital and the ability to share responsibilities.
- The partnership itself doesn’t pay taxes. Each partner reports his share of income and losses on his tax returns and losses are tax deductible.
- General partners have unlimited liability and may lose their personal assets.
- The partnership terminates upon the death of a general partner. A new Partnership Agreement must be signed each time a partner joins or leaves the business.
PRIVATE LIMITED COMPANY / LIMITED LIABILITY COMPANY
- In England this business form is known as “private limited company” or “private company limited by shares” (Ltd.), being a traditional and common business form. In the US it is known as a “limited liability company” (LLC) and is a relatively new business form, first having been adopted in the 1970s.
- It comprises a separate legal entity (is an “artificial”, not natural person)
- In England it has perpetual succession regardless of changes in membership. In the US the LLC laws of many states limit its existence to 30 years.
- There are no minimum capital or share payment requirements.
- There are no limitations on the number of owners.
- This business form provides limited liability for its members.
- Legal requirements are less cumbersome than those for corporations.
- These companies must comply with stricter legal requirements than those applying to partnerships (i.e., public inspection of accounts, annual audits, etc.).
- In the US there is no uniform LLC law. The laws and organizational requirements vary from state to state.
PUBLIC LIMITED COMPANY / CORPORATION
- Called “public limited company” (plc) in England and “corporation” (Inc.) in the US.
- It is a separate legal entity distinct from its owners.
- It can have perpetual existence as specified in its Memorandum of Association/ Articles of Incorporation, despite the death, incapacitation or withdrawal of its officers, directors and shareholders.
- Management is distinct from ownership. Officers are appointed by directors elected by shareholders. Shareholders holding the most stock control the corporation; control is exercised through regular meetings of the board of directors and annual shareholders’ meetings
- In England there are minimum capital requirements for plc’s and a certain percentage of the share capital must be paid up.
- These companies are subject to double taxation: the corporation pays income tax on its net profits and shareholders’ dividends are a part of their personal income.
- Corporate shareholders’ liability is limited to the amount invested.
- A corporation has a greater capacity to raise capital and more access to investors.
- Ownership, i.e., shares in the corporation are transferable and inheritable.
- A corporation’s existence isn’t jeopardized by the death or a change in ownership.
- It is much more complex and costly to set up and operate than other business forms.
- It is subject to stricter legal controls, such as making accounts public and conducting annual audits.
- It must maintain accounting records and file income tax returns.
10 FAQs—Acquiring a Business in Spain:
Ten Most Frequently Asked Questions
(excerpt from a bulletin prepared by DLA Piper Rudnick Gray Cary, Global Legal Services)
What type of Spanish vehicles can we use?
- Typically, the most common vehicles used in Span are companies with liability limited by shares (“Sociedad Anónima” or “SA”) or companies with liability limited by participations (“Sociedad Limitada” or “SL”), whether “off the-shelf” or newly incorporated. In either case, single member companies are permitted.
- SLs are generally used for businesses owned by a reduced number of members or where a lesser degree of formalities is required. SAs may be more suitable for wider shareholding structures or where it is anticipated that financing from capital markets may be necessary.
- Unlike the SA, the SL is a so-called “closed” company, in which the transfer of participations is, by operation of law, restricted. A SL may not access capital markets (flotation is not allowed) or issue debentures. However, procedures for SLs are simpler than those for the SA (for instance, no experts’ report is required for capital increases with contributions in kind). SLs allow for more restrictive provisions in their by-laws regarding transfer of participations.
- By-laws of SAs and SLs are publicly accessible. Therefore, for this reason, or because certain matters may not by law be regulated in the by-laws, members may also enter into members’ or shareholders’ agreement. This type of agreement is not publicly accessible (save in certain cases for listed companies).
- SLs (as opposed to SAs) may in certain cases be suitable for the “check-the-box” election, under which a US parent company may elect that a subsidiary entity be treated as tax transparent for U.S. tax purposes. This facilitates elimination of double taxation of the same profits and can create a hybrid entity with the potential for a double dip.
What does it take to set up a company?
Setting up a SA or SL involves a two-tier process:
- Execution of the formation deed before a Spanish notary; and
- Registration at the Mercantile Registry of the address of the new company’s principal place of business in Spain (i.e. the so-called registered office address).
- The minimum permitted capital for a SL is €3,006, which needs to be fully paid up on its formation. For a SA, the minimum is €60,102, although only 25% needs to be paid up on incorporation. In certain cases, for regulatory reasons, these limits may be higher.
- Typically, a bank account will have to be opened in Spain in order to transfer the funds for the capital of the company.
- The physical presence of the member(s) or the directors to be appointed is not required for the purposes of setting-up of the company in Spain. Setting-up without physical presence will require the granting of a notarial power of attorney, which will have to be apostilled in accordance with the 1961 Hague Convention if notarised outside Spain. If the country where it is granted is not a party to this convention, special rules apply.
- There are no restrictions under Spanish law in relation to the identity or nationality of the members. If, however, the Spanish company is to be wholly owned by a single member, it will need to add the word “unipersonal” (single member company) in all its official letterhead and correspondence and would also need to maintain a register of all transactions entered into by the company with its single member.
- There are several options for the management structure of both SAs and SLs, each of which is mutually exclusive:
- Sole Director or “Administrador Unico”. This is often the preferred structure where important decisions need to be taken relatively quickly and easily, and where a trusted individual is available in Spain; or
- Joint Directors or “Administradores Mancomunados” (directors who may only act jointly). This may be appropriate where unanimity of decision-making is required; or
- Joint and Several Directors or “Administradores Solidarios” (two or more directors who may take decisions either jointly or severally); or
- Board of Directors or “Consejo de Administración” (not less than three directors), jointly voting on the relevant resolutions. In this case, a company secretary must also be appointed. Board resolutions may be adopted in writing. Meetings may be held by means of telecommunication methods;
- Directorships may be held either by legal entities or individuals. In the former case, an individual will be designated as representative.
- In principle, there is no restriction under Spanish law for the managers of the company to be foreign citizens or companies, or for them to be non resident in Spain. However, since directors represent the company vis-à-vis third parties, including the Spanish authorities (Tax Authorities, other regulatory bodies, etc.), in practice, complying with certain formal requirements under Spanish law may be difficult when the only authorised individuals to act for and on behalf of a company are not in Spain.
- The whole process of setting-up a company, with a set of standard by-laws, may take between three to five weeks.
Registration at the Mercantile Registry may take up to four additional weeks. Completion of transactions may however be effected before registration is attained. Nevertheless, the shares or participations of the newly created company may not be transferred before registration (similar rules apply in the case of new capital issued after a capital increase).
(Source: Lectric Law Library)
Sample Articles of Incorporation
ARTICLES OF INCORPORATION OF [NAME]
The undersigned subscriber to these Articles of Incorporation, a natural person competent to contract, hereby forms a corporation under the laws of the State of [NAME].
ARTICLE I–NAME. The name of the corporation shall be [NAME].
ARTICLE II–NATURE OF BUSINESS. This corporation may engage in or transact any and all lawful activities or business permitted under the laws of the United States, the State of [NAME], or any other state, county, territory or nation.
ARTICLE III–CAPITAL STOCK. The maximum number of shares of stock that this corporation is authorized to have outstanding at any one time is [#] shares of common stock having a par value of $l.00 per share.
ARTICLE IV—ADDRESS. The street address of the initial registered office of the corporation shall be [ADDRESS] and the name of the initial Registered Agent for the corporation at that address is [NAME].
ARTICLE V–SPECIAL PROVISIONS. The stock of this corporation is intended to qualify under the requirements of Section 1244 of the Internal Revenue Code and the regulations issued thereunder. Such actions as may be necessary shall be deemed to have been taken by the appropriate officers to accomplish this compliance.
ARTICLE VI–TERM OF EXISTENCE. This corporation shall exist perpetually.
ARTICLE VII–LIMITATION OF LIABILITY. Each director, stockholder and officer, in consideration for his services, shall, in the absence of fraud, be indemnified, whether then in office or not, for the reasonable cost and expenses incurred by him in connection with the defense of, or for advice concerning any claim asserted or proceeding brought against him by reason of his being or having been a director, stockholder or officer of the corporation or of any subsidiary of the corporation, whether or not wholly owned, to the maximum extent permitted by law. The foregoing right of indemnification shall be inclusive of any other rights to which any director, stockholder or officer may be entitled as a matter of law.
ARTICLE VIII–SELF DEALING. No contract or other transaction between the corporation and other corporations, in the absence of fraud, shall be affected or invalidated by the fact that any one or more of the directors of the corporation is or are interested in a contract or transaction, or are directors or officers of any other corporation, and any director or directors, individually or jointly, may be a party or parties to, or may be interested in such contract, act or transaction, or in any way connected with such person or person’s firm or corporation, and each and every person who may become a director of the corporation is hereby relieved from any liability that might otherwise exist from this contracting with the corporation for the benefit of himself or any firm, association or corporation in which he may be in any way interested. Any director of the corporation may vote upon any transaction with the corporation without regard to the fact that he is also a director of such subsidiary or corporation. This corporation shall have a minimum of one director. The initial Board of Directors shall consist of: [NAME] [NAME] [NAME] [NAME]
ARTICLE X—INCORPORATOR. The name and address of the incorporator is: [ADDRESS]
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal on this _____day of ___________________, 20_____.
STATE OF [NAME]
COUNTY OF [NAME]
The foregoing instrument was executed and acknowledged before me this ________ day of _____________________, 20____, by [NAME].
State of [NAME]
My Commission Expires: [DATE]
Bylaws of XYZ, Inc.
(A Delaware Corporation)
Section 1.01 Offices. The Corporation shall have its registered office in the State of Delaware, and may have such other offices and places of business within or without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require.
Section 2.01 Place of Meetings. Meetings of stockholders for any purpose may be held at such place or places, either within or without the State of Delaware, as shall be designated by the Board of Directors, or by the President with respect to meetings called by him.
Section 2.02 Annual Meeting. The annual meeting of stockholders shall be held on such date as may be determined by the Board of Directors. At such meeting, the stockholders shall elect a Board of Directors and transact such other business as may properly come before the meeting.
Section 2.03 Special Meetings. Special meetings of stockholders may be called at any time by the Board of Directors or by the President, and shall be called by the President or Secretary at the written request of stockholders owning a majority of the shares of the Corporation then outstanding and entitled to vote.
Section 2.04 Notice of Meetings. Written notice of the annual meeting or any special meeting of stock shall be given to each stockholder entitled to vote thereat, not less than ten nor more than sixty days prior to the meeting, except as otherwise required by statute, and shall state the time and place and, in the case of a special meeting, the purpose or purposes of the meeting. Notice need not be given, however, to any stockholder who submits a signed waiver of notice, before or after the meeting, or who attends the meeting in person or by proxy without objecting to the transaction of business.
Section 2.05 Quorum. At all meetings of stockholders, the holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum for the transaction of business, except as otherwise provided by statute, the Certificate of Incorporation or these By-Laws. When a quorum is once present to organize a meeting, it is not broken by the subsequent withdrawal of any stockholder.
Section 2.06 Voting. (a) At all meetings of stockholders, each stockholder having the right to vote thereat may vote in person or by proxy, and, unless otherwise provided in the Certificate of Incorporation or in any resolution providing for the issuance of any class or series of stock adopted by the Board of Directors pursuant to authority vested in the Board by the Certificate of Incorporation, shall have one vote for each share of stock registered in his name. Election of directors shall be by written ballot.
(b) When a quorum is once present at any meeting of stockholders, a majority of the votes cast, whether in person or represented by proxy, shall decide any question or proposed action brought before such meeting, except for the election of directors, who shall be elected by a plurality of the votes cast, or unless the question or action is one upon which a different vote is required by express provision of statute, the Certificate of Incorporation or these By-Laws or an agreement among stockholders, in which case such provision shall govern the vote on the decision of such question or action.
Section 2.07 Adjourned Meetings. Any meeting of stockholders may be adjourned to a designated time and place by a vote of a majority in interest of the stockholders present in person or by proxy and entitled to vote, even though less than a quorum is present, or by the President if a quorum of stockholders is not present. No notice of such adjourned meeting need be given, other than by announcement at the meeting at which adjournment is taken, and any business may be transacted at the adjourned meeting which might have been transacted at the meeting as originally called. However, if such adjournment is for more than thirty days, or if after such adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at such meeting.
Section 2.08 Action by Written Consent of Stockholders. Any action of the stockholders required or permitted to be taken at any regular or special meeting thereof may be taken without any such meeting, notice of meeting or vote if a consent in writing setting forth the action thereby taken is signed by the holders of outstanding stock having not less than the number of votes that would have been necessary to authorize such action at a meeting at which all shares entitled to vote were present and voted. Prompt notice of the taking of any such action shall be given to any stockholders entitled to vote who have not so consented in writing.
Section 2.09 Stockholders of Record. (a) The stockholders from time to time entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to any corporate action without a meeting, or entitled to receive payment of any dividend or other distribution or the allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, shall be the stockholders of record as of the close of business on a date fixed by the Board of Directors as the record date for any such purpose. Such a record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and shall not, with respect to stockholder meetings, be more than sixty days nor less than ten days before the date of such meeting, or, with respect to stockholder consents, more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors.
(b) If the Board of Directors does not fix a record date, (i) the record date for the determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall be as of the close of business on the day next preceding the day on which notice of such meeting is given, or, if notice is waived as provided herein, on the day next preceding the day on which the meeting is held; (ii) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, where no prior action by the Board of Directors is necessary, shall be the close of business on the day on which the first signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation; and (iii) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the resolution of the Board of Directors relating thereto is adopted.
Section 3.01 Board of Directors. The management of the affairs, property and business of the Corporation shall be vested in a Board of Directors, the members of which need not be stockholders. In addition to the power and authority expressly conferred upon it by these By-Laws and the Certificate of Incorporation, the Board of Directors may take any action and do all such lawful acts and things on behalf of the Corporation and as are not by statute or by the Certificate of Incorporation or these By-Laws required to be taken or done by the stockholders.
Section 3.02 Number. The number of directors shall be as fixed from time to time by the Board of Directors.
Section 3.03 Election and Term of Directors. At each annual meeting of the stockholders, the stockholders shall elect directors to hold office until the next annual meeting. Each director shall hold office until the expiration of such term and until his successor, if any, has been elected and qualified, or until his earlier resignation or removal.
Section 3.04 Annual and Regular Meetings. The annual meeting of the Board of Directors shall be held promptly after the annual meeting of stockholders, and regular meetings of the Board of Directors may be held at such times as the Board of Directors may from time to time determine. No notice shall be required for the annual or any regular meeting of the Board of Directors.
Section 3.05 Special Meetings. Special meetings of the Board of Directors may be called by the President, by an officer of the corporation who is also a director or by any two directors, upon one day’s notice to each director either personally or by mail, telephone, telecopier or telegraph, and if by telephone, telecopier or telegraph confirmed in writing before or after the meeting, setting forth the time and place of such meeting. Notice of any special meeting need not be given, however, to any director who submits a signed waiver of notice, before or after the meeting, or who attends the meeting without objecting to the transaction of business.
Section 3.06 Place of Meetings. (a) The Board of Directors may hold its meetings, regular or special, at such places, either within or without the State of Delaware, as it may from time to time determine or as shall be set forth in any notice of such meeting.
(b) Any meeting of the Board of Directors may be held by means of conference telephone or similar communications equipment whereby all persons participating in the meeting can hear each other, and such participation shall constitute presence at the meeting.
Section 3.07 Adjourned Meetings. A majority of the directors present, whether or not a quorum, may adjourn any meeting of the Board of Directors to another time and place. Notice of such adjourned meeting need not be given if the time and place thereof are announced at the meeting at which the adjournment is taken.
Section 3.08 Quorum of Directors. A majority of the total number of directors shall constitute a quorum for the transaction of business. The total number of directors means the number of directors the Corporation would have if there were no vacancies.
Section 3.09 Action of the Board of Directors. The vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, unless the question or action is one upon which a different vote is required by express provision of statute, the Certificate of Incorporation or these By-Laws, in which case such provision shall govern the vote on the decision of such question or action. Each director present shall have one vote.
Section 3.10 Action by Written Consent of Directors. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if a written consent thereto is signed by all members of the Board of Directors or of such committee, and such written consent is filed with the minutes of proceedings of the Board of Directors or committee.
Section 3.11 Resignation. A director may resign at any time by giving written notice to the Board of Directors, the President or the Secretary of the Corporation. Unless otherwise specified in the notice, the resignation shall take effect upon receipt by the Board of Directors or such officer, and acceptance of the resignation shall not be necessary.
Section 3.12 Removal of Directors. Any or all of the directors may be removed with or without cause by the stockholders.
Section 3.13 Newly Created Directorships and Vacancies. Newly created directorships resulting from an increase in the number of directors or vacancies occurring in the Board of Directors for any reason except the removal of directors without cause may be filled by a vote of the majority of the directors then in office, although less than a quorum. Vacancies occurring by reason of the removal of directors without cause shall be filled by a vote of the stockholders. A director elected to fill a newly created directorship or to fill any vacancy shall hold office until the next annual meeting of stockholders, and until his successor, if any, has been elected and qualified.
Section 3.14 Chairman. At all meetings of the Board of Directors the Chairman of the Board or, if one has not been elected or appointed or in his absence, a chairman chosen by the directors present at such meeting, shall preside.
Section 3.15 Committees Appointed by the Board of Directors. The Board of Directors may, by resolution passed by a majority of the entire Board of Directors or by written consent of all of the directors, designate one or more committees, each committee to consist of one or more of the directors. The Board may also designate one or more directors as alternate members of any committee who may replace any absent or disqualified committee member at any committee meeting. Any such committee, to the extent provided in the resolution, except as restricted by law, shall have and may exercise the powers of the Board of Directors in the management of the affairs, business and property of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it.
Section 3.16 Compensation. No compensation shall be paid to directors, as such, for their services, but the Board of Directors may authorize payment of an annual retainer and/or fixed sum and expenses for attendance at each annual, regular or special meeting of the Board of Directors. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity and receiving compensation therefor.
Section 4.01 Offices, Election and Term. (a) At its annual meeting the Board of Directors shall elect or appoint a President and a Secretary and may, in addition, elect or appoint at any time such other officers as it may determine. Any number of offices may be held by the same person.
(b) Unless otherwise specified by the Board of Directors, each officer shall be elected or appointed to hold office until the annual meeting of the Board of Directors next following his election or appointment and until his successor, if any, has been elected or appointed and qualified, or until his earlier resignation or removal.
(c) Any officer may resign at any time by giving written notice to the Board of Directors, the President or the Secretary of the Corporation. Unless otherwise specified in the notice, the resignation shall take effect upon receipt thereof, and the acceptance of the resignation shall not be necessary to make it effective.
(d) Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause. Any vacancy occurring in any office by reason of death, resignation, removal or otherwise may be filled by the Board of Directors.
Section 4.02 Powers and Duties. The officers, agents and employees of the corporation shall each have such powers and perform such duties in the management of the affairs, property and business of the Corporation, subject to the control of and limitation by the Board of Directors, as generally pertain to their respective offices, as well as such powers and duties as may be authorized from time to time by the Board of Directors.
Section 4.03 Sureties and Bonds. If the Board of Directors shall so require, any officer, agent or employee of the Corporation shall furnish to the Corporation a bond in such sum and with such surety or sureties as the Board of Directors may direct, conditioned upon the faithful performance of his duties to the Corporation and including responsibility for negligence and for the accounting for all property, funds or securities of the corporation which may come into his hands.
CERTIFICATES AND TRANSFER OF SHARES
Section 5.01 Certificates. Unless otherwise provided pursuant to the General Corporation Law of the State of Delaware, the shares of stock of the Corporation shall be represented by certificates, as provided by the General Corporation Law of the State of Delaware. They shall be numbered and entered in the books of the Corporation as they are issued.
Section 5.02 Lost or Destroyed Certificates. The Board of Directors may in its discretion authorize the issuance of a new certificate or certificates in place of any certificate or certificates theretofore issued by the Corporation, alleged to have been lost, stolen or destroyed. As a condition of such issuance, the Board of Directors may require, either generally or in each case, the record holder of such certificates, or his legal representative, to furnish an affidavit setting forth the facts of such alleged loss, theft or destruction, together with proof of advertisement of the alleged loss, theft or destruction, and a bond with such surety and in such form and amount as the Board may specify indemnifying the Corporation, any transfer agent and registrar against any claim against any of them relating to such lost, stolen or destroyed certificates.
Section 5.03 Transfer of Shares. (a) Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares or other securities of the Corporation duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the corporation shall issue a new certificate to the person entitled thereto, and cancel the old certificate, except to the extent the Corporation or such transfer agent may be prevented from so doing by law, by the order or process of any court of competent jurisdiction, or under any valid restriction on transfer imposed by the Certificate of Incorporation, these By-Laws, or agreement of security holders. Every such transfer shall be entered on the transfer books of the Corporation.
(b) The Corporation shall be entitled to treat the holder of record of any share or other security of the Corporation as the holder in fact thereof and shall not be bound to recognize any equitable or other claim to or interest in such share or security on the part of any other person whether or not it shall have express or other notice thereof, except as expressly provided by law.
Section 6.01 Indemnification. The Corporation shall indemnify the directors, officers, agents and employees of the Corporation in the manner and to the full extent provided in the General Corporation Law of the State of Delaware. Such indemnification may be in addition to any other rights to which any person seeking indemnification may be entitled under any agreement, vote of stockholders or directors, any provision of these By-Laws or otherwise. The directors, officers, employees and agents of the Corporation shall be fully protected individually in making or refusing to make any payment or in taking or refusing to take any other action under this Article VI in reliance upon the advice of counsel.
Section 7.01 Corporate Seal. The seal of the Corporation shall be circular in form and bear the name of the Corporation, the year of its organization and the words, “Corporate Seal, Delaware”. The seal of the certificates for shares or any corporate obligation for the payment of money, or on any other instrument, may be a facsimile, engraved, printed or otherwise reproduced.
Section 7.02 Execution of Instruments. All corporate instruments and documents shall be signed or countersigned, executed, and, if desired, verified or acknowledged by a proper officer or officers or such other person or persons as the Board of Directors may from time to time designate.
Section 7.03 Fiscal Year. The fiscal year of the Corporation shall be as determined by the Board of Directors.
Section 8.01 Amendments. These By-Laws may be altered, amended or repealed from time to time by the stockholders or by the Board of Directors without the assent or vote of the stockholders.
Copyright 1998 Steven M. Sack
The Content of Business Law in Spain
El Derecho Mercantil
- Fuentes del Derecho Mercantil
El empresario mercantil y la empresa
Derecho de sociedades
- La sociedad civil
- Las sociedades mercantiles
- La sociedad colectiva
- La sociedad comanditaria simple
- La sociedad comanditaria por acciones
- La sociedad de responsabilidad limitada
- La sociedad anónima
- Patentes de invención
- Modelos de utilidad
- Modelos y dibujos industriales
Derecho de la competencia
- Competencia desleal
Derecho de la publicidad
Derecho del mercado financiero
- Mercado de valores
Derecho de los seguros privados
- Letra de cambio, cheque, pagaré
Table-Spanish Business Vehicles
|No. of members
|How capital is represented
|Initial capital outlay
(S.C. or S.R.C.)
(S. en Com. or S.Com.)
(S.L. or S. R.L.)
 Roger LeRoy Miller and Gaylord A. Jentz, Business Law Today, 5th ed. West, 2000.