The regulatory scenario surrounding M&A transactions has taken a significant turn with the introduction of Royal Decree-Law 5/2023, enacted on 29 June. This decree replaces the previous Structural Modifications Law, introducing a variety of legal provisions concerning transformations, mergers and global divestitures, among other aspects.
Criticisms and Controversies in the New Regulation
Legislative Methodology
Any regulatory change of this magnitude generates reactions. Despite the urgency expressed for the approval of this regulation, there is criticism of the legislative method used. Some experts suggest that excessive recourse has been made to the Royal Decree-Law. These changes, although necessary, require careful planning and consultation to avoid unwanted impacts.
Ambiguities and Grey Areas
An effective legal framework must be clear and straightforward. However, the new regulation has ambiguous grey areas. One of these is its transitional regime, creating uncertainty as to which legal framework applies to operations started, but not completed, prior to 29 July 2023.
New and Significant Changes
Tax and Social Security Obligations
The tax and social security landscape is constantly evolving. In this context, one of the most discussed changes is the new obligation for companies to demonstrate that they are up to date with their commitments, which will undoubtedly influence the strategic decisions of organisations.
Creditor and Shareholder Protection
The balance between incentivising business activity and protecting different actors is crucial. New safeguards are introduced which, while seeking to protect creditors and partners, can affect the speed and efficiency of operations.
Worker’s Participation
In an effort to democratise the process, workers, creditors and shareholders are given the right to comment on proposed amendments. This underlines the importance of transparency and participation in corporate decisions.
At Confianz we fully understand the implications of the new regulations and, from our experience, we want to be that firm compass for companies that venture into the transformation process. Our mission goes beyond mere consultancy: we seek to be that pillar of support, offering tools and essential knowledge to adapt successfully. Because in a world full of challenges, we are proud to say that with Confianz by your side, every step is taken with certainty and confidence.