Company Law - SPA (Limited by Shares)
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Questions and Answers

What is the primary role of a notary when incorporating an SPA?

  • To ensure the company's articles of association comply with legal provisions. (correct)
  • To manage the company's assets and liabilities.
  • To evaluate the financial viability of the company.
  • To act as a representative of the shareholders during the incorporation process.

What are the two main phases involved with incorporating an SPA?

  • Submitting a business plan and securing funding.
  • Drafting the instrument of incorporation and registering it. (correct)
  • Negotiating contracts with suppliers and employees.
  • Creating a company website and marketing strategy.

What does simultaneous incorporation refer to?

  • When the incorporation process is completed within a specific timeframe.
  • When shareholders fully subscribe to the share capital at the time of signing the incorporation documents. (correct)
  • When multiple companies are incorporated simultaneously.
  • When the incorporation process is overseen by a public official.

Which of the following is NOT a necessary detail included in the instrument of incorporation?

<p>Details of the company's business plan. (B)</p> Signup and view all the answers

What is the significance of registering an SPA with the companies register?

<p>It grants the company legal personality and allows it to operate independently. (A)</p> Signup and view all the answers

Which of the following is NOT a benefit of having a notary review the incorporation documents?

<p>It guarantees the financial success of the company. (A)</p> Signup and view all the answers

In the context of an SPA, what does the term liability refer to?

<p>The financial obligations of the company to its creditors. (C)</p> Signup and view all the answers

What is the minimum number of shareholders required to incorporate an SPA?

<p>One. (C)</p> Signup and view all the answers

What is a key characteristic of an SPA (single-person limited liability company) in terms of liability?

<p>The sole shareholder has limited liability, but only if they have made their full pledged contribution. (D)</p> Signup and view all the answers

How does the decision-making power work in a shareholder's meeting of an SPA?

<p>Voting power is proportional to the number of shares each shareholder owns. (A)</p> Signup and view all the answers

What is the primary role of the shareholder meeting in an SPA?

<p>To make the most significant decisions regarding the company's direction and strategy. (C)</p> Signup and view all the answers

What is the significance of the 'nominal value' of a share in an SPA?

<p>It is a theoretical value that helps standardize the value of all shares in the company. (C)</p> Signup and view all the answers

Which of the following statements is TRUE regarding the liability of shareholders in an SPA?

<p>Shareholders are only liable for their pledged contributions, nothing more. (D)</p> Signup and view all the answers

What is the key difference between the management body and the shareholder meeting in an SPA?

<p>The management body has operational authority, while the shareholder meeting has strategic authority. (A)</p> Signup and view all the answers

The concept of 'limited liability' for shareholders in an SPA means that:

<p>They are only liable for their pledged contributions, and nothing more. (A)</p> Signup and view all the answers

In which situation can a shareholder in an SPA lose more than their initial investment?

<p>If the company goes bankrupt and the shareholder has not made their full pledged contribution. (A)</p> Signup and view all the answers

What is a key characteristic of an SPA (Societas per Actiones) that distinguishes it from other types of business entities?

<p>It has a structure with three distinct bodies: the shareholder's meeting, an administrative body, and an internal control body. (A)</p> Signup and view all the answers

What is the primary function of the shareholder's meeting within an SPA?

<p>To express the collective will of the shareholders in matters reserved for their competence by law or the company's bylaws. (C)</p> Signup and view all the answers

How is the will of the shareholder's meeting expressed and enforced within an SPA?

<p>Through a majority vote based on the percentage of share capital held by each shareholder. (B)</p> Signup and view all the answers

Which of these is NOT considered a responsibility or decision-making power of an ordinary shareholder's meeting in an SPA?

<p>Developing the company's strategic business plan and setting long-term goals for the company. (D)</p> Signup and view all the answers

What is the primary distinction between ordinary shareholder's meetings and extraordinary shareholder's meetings in an SPA?

<p>The distinction lies in the topics discussed, with ordinary meetings focusing on specific issues assigned to their competence by law or bylaws, while extraordinary meetings discuss matters not explicitly designated to the ordinary meeting. (E)</p> Signup and view all the answers

What is the main reason behind the restrictions placed on voting rights for shares held by a company itself within an SPA?

<p>To protect the interests of minority shareholders by preventing the company from holding a disproportionate amount of voting power. (A)</p> Signup and view all the answers

What are the restrictions placed on dividends and pre-emption rights related to shares held by the company itself within an SPA?

<p>These rights are distributed proportionally among all shareholders. (C)</p> Signup and view all the answers

What process needs to be followed for the company to sell shares that it holds within an SPA?

<p>The sale requires authorization from the shareholders' meeting. (B)</p> Signup and view all the answers

Flashcards

Spa - Company Limited by Shares

A separate legal entity distinct from shareholders, responsible for its own obligations.

Limited Liability of Shareholders

Shareholders are not personally liable for company debts, only for their pledged contributions.

Single-member SPA Exception

In a single-member SPA, the sole shareholder has unlimited liability if contributions are unpaid.

Shareholder’s Meeting

The assembly where shareholders express intentions and make key decisions based on majority principle.

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Management Body

The group of directors responsible for the day-to-day operations of the company.

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Internal Control Body

A body that supervises the management body to ensure compliance and performance.

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Shares

Units of ownership in a company, standardized and providing equal rights to their holders.

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Negotiable Instruments

Documents that guarantee payment of a specific amount, facilitating the circulation of shares.

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Voting Rights Restrictions

Companies cannot exercise voting rights on their own shares.

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Shareholder's Meeting

A collective body where shareholders exercise their rights and form company will.

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Ordinary Shareholder's Meeting

Meeting that approves financial statements and appoints directors.

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Extraordinary Shareholder's Meeting

Meeting dealing with significant issues requiring shareholder approval.

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Majority Principle

Decisions at the shareholder's meeting are based on the majority of share capital.

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Administrative Body

A governing body responsible for managing a company within an SPA structure.

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Two-Tier System

Management structure consisting of a supervisory body and management board.

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Standardized documents

Documents that grant holders rights to certain benefits.

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Limited liability

Shareholders are not personally liable for the company's debts.

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Incorporation phases

Two key steps: drafting and registering the incorporation document.

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Legal personality

A company becomes a separate entity after registration.

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Notary's role

Authorized public official who drafts the incorporation instrument.

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Simultaneous incorporation

Incorporation where founders sign documents and subscribe share capital at once.

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Public subscription incorporation

Incorporation method that allows raising capital from the public.

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Instrument of incorporation requirements

Must include shareholder details such as domicile and nationality.

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Study Notes

Company Law - SPA (Limited by Shares)

  • A SPA is an autonomous legal entity separate from its shareholders.
  • Only the company is liable for its obligations.
  • Shareholders have limited liability, meaning their personal assets are protected.
  • The exception is a single-member SPA, where the sole shareholder has unlimited liability unless specific contributions are made.
  • A company needs three bodies: Shareholder's meeting, Management body, and Internal control body.

Shareholder's Meeting

  • Shareholders express their intentions at the meeting.
  • Voting power is proportional to the share of capital held.
  • Major decisions are made at the meeting.
  • The management body is responsible for the day-to-day running.
  • Shares are uniform, standardized, and have equal value.
  • The company's capital is divided by the number of shares.

Shareholder Participation

  • Participants are represented by shares.
  • Shares have a nominal value (the value used for calculation of capital).
  • Shares can circulate as negotiable instruments.
  • Shareholder's rights are limited by liability.
  • The value can be checked by the value of the assets.

Incorporating an SPA

  • There are two phases—drawing up the instrument of incorporation and registering it.
  • The instrument of incorporation must include:
    • Details of the shareholders.
    • Nationality of shareholders.
    • Number and assigned shares.
    • Registered office details
    • Company object and the activities to be carried out.
    • Company duration.
  • Cash contributions are mandatory unless otherwise specified.
  • Incorporation can be simultaneous or via a public subscription.
  • The specific requirements and legal norms must be adhered to.
  • Shareholder registration is the notary's responsibility.

Nullity of Companies Limited by Shares

  • A company can be declared invalid if the instrument of incorporation is not completed legally, if there is an illegality in the object of the company, or insufficient information regarding company’s name or its capital amount.
  • The declaration of nullity does not invalidate the pre-registration actions of the company.
  • Companies limited by shares have a specific procedure for declaration of nullity, only available if registered.

Contributions

  • Contributions must be made in cash.
  • Cash contributions are required at incorporation (25%), or the full amount if unilateral incorporation.
  • Contribution of assets in kind must be independently valued.
  • Share capital must be at least 50,000.

Shares

  • Shares represent the part of the shareholder’s equity dedicated to the business output.
  • Shares must have the same value, representing the equal proportions of capital.
  • Nominal value of each share reflects the part of the share capital represented by it.
  • Shares may be issued with/without a nominal value.
  • Share value must not be more than the nominal share capital.

Special Categories of Shares

  • Companies can issue special shares with additional/different rights.
  • Voting rights may depend on the number of shares held.
  • Special shares can have voting restrictions.
  • The total value of these shares cannot exceed 50% of the company's share capital.
  • Special rules may apply.
  • Limitations in the transfer of shares are possible.

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Description

This quiz explores the key concepts of a Spa (Sociedad por Acciones) limited by shares, focusing on its legal structure, the responsibilities of shareholders, and the functioning of shareholder meetings. Understand the implications of limited liability and the roles of the company's governing bodies. Test your knowledge on shareholder participation and company capital.

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