Corporate spin-offs
Company spin-offs are a commercial operation in which part of a company is divided with a specific objective in mind. It is a complex operation that requires prior planning and can significantly impact employees, customers, brand, and shareholders. For this reason, the presence of experts who can advise you from a legal and financial perspective is essential. From our Notary Office in Barcelona, we wish to explain this procedure and the importance of our role in the spin-off of companies.
The deeds of company demergers can be processed online, so do not hesitate to contact us if you need to carry out this procedure, we will be happy to help you.
What is a company spin-off?
Company demergers occur when a company decides to separate part of its assets, liabilities and share capital with the aim of creating a new company or growing an existing company by increasing its capitalisation. The demerging company, that is, the original one, may or may not disappear, but it is common for a change to occur in its company name.
The concept of demerger of commercial companies encompasses a series of complex operations, among which is the transfer of the assets of the demerged company through shares or stakes. This means that the shareholders of the original company will become shareholders of the demerged companies.
Like company mergers, company demergers are regulated by Royal Decree-Law 5/2023 of 28 June.
Objective of the demerger of companies
The needs of companies change over time and therefore they must sometimes be restructured. For this reason, company spin-offs can occur to:
- Obtain capital leverage by bringing in new partners
- Strategic decisions to improve branding
- Diversify risks or adapt to the particularities of the sector
- Achieve social objectives
- Use different policies in the various branches of the company's activity
- Separate the company's activities and simplify the corporate structure to increase efficiency
- In disagreements between partners, so that each can continue the activity in their own company
- Occasionally, to comply with competition regulations
Types of demergers of commercial companies
We distinguish three types of demerger of commercial companies:
Total spin-off of a company
In company demergers, a total demerger occurs when the commercial company is divided into two or more companies and the demerged company ceases to exist. The resulting or “beneficiary” companies receive the assets of the demerged company. They can be new or pre-existing companies and in them, the shareholders receive shares or stocks proportional to the demerged company.
Partial or improper demerger of a company
The difference with a total demerger lies in the fact that in a partial demerger the disappearance of the demerged company does not occur. Those that are formed (created or pre-existing) alongside the main one will be independent from each other. Partial demergers of companies occur when the business branches of a demerged company are distinct. In partial demergers of companies, the shareholders retain their shares (which may undergo a reduction corresponding to the demerger) and shares or stocks of the beneficiary companies.
Segregation or spin-off of majority shareholdings
In the demerger, the beneficiary company (created or pre-existing) is established as a subsidiary of the demerged company and it is precisely this one that receives the shares or stocks.
Steps of the demerger of companies
There are three phases in company demergers:
Preparatory phase in company spin-offs
Once the decision for the demerger of companies has been made, the drafting of the common demerger project will take place. This identifies the companies involved, determining their company name, registered office, type of company, establishes the type of exchange (how the change of shares or stocks between their partners or shareholders will occur), the valuation of the assets and liabilities of each company. It also sets out the possible consequences of the demerger, the compensations to the affected partners, the impact on the management bodies or CSR, the rights of holders, the advantages caused by the demerger, and the date on which the shareholders and partners will start to participate in profits. In addition, the articles of association of the beneficiary companies must be mentioned and a report from the management justifying the demerger project will be developed.
Subsequently, the project will be filed with the Commercial Registry and published on the site of the participating companies.
Likewise, this first stage in which the preparation of the demerger of companies is formed must include the demerger balance sheet of each company (a balance sheet from within 6 months prior to the date of the demerger project is acceptable) and a report from independent experts appointed by the Commercial Registry in the case of public limited companies, containing information about the non-monetary assets transferred in the demergers of companies.
Decision phase of the demerger process
At this stage, the convening of the General Meeting takes place, in which the agreement on the demerger of companies must be determined. In this meeting, the demerger project is approved according to the legal requirements specific to each type of company and must be processed in all the demerged and beneficiary companies.
Next, communication is made to the company staff and publication in the BORME (Official Gazette of the Commercial Registry) and widely circulated newspapers in the provinces of the registered offices of the entities. One of the objectives is to enable the processing of the right of opposition to the demerger by the creditors.
Execution phase of the spin-off
Once the previous steps have been completed, the deed of company demerger before a Notary is formalised and the deed is registered in the Commercial Registry, from which point the demerger will take effect.
Finally, the tax and employment deregistration will be processed with the Tax Agency and Social Security (AEAT and TGSS) and in the relevant communications to the AEAT.
Deed a company spin-off online or at a notary's office
The deed of division agreement must be notarised before a Notary. It is essential that the deed of division contains the type of division (total, partial or segregation) and its form of constitution, whether by new company or type of division.
We would like to remind you that this procedure can be carried out online, through the notarial portal, or in person at our notary office.
The role of the Notary in company demergers
The Notary is a legal professional who guarantees the legality and authenticity of corporate demerger operations.
In the complexity demonstrated by company mergers, the figure of the Notary plays a decisive role, advising and counselling impartially throughout the procedure, not only for the deed of company demerger, but also during the creation of the new company or restructuring of existing ones and related public deeds that must be granted. Please share your doubts and make all the enquiries you consider appropriate.
JLA Notarios acts objectively and neutrally, certifying the authenticity of your documents and securing your transactions, so that procedures such as the deed of company demerger comply with laws and regulations, guaranteeing legal certainty and giving credibility to the facts presented in the deed.
The Notary validates both the documentation presented and the drafting of the deed by signing the document and carries out complementary tasks such as registering the deed in the Mercantile Registry.
Documentation for the public deed of company spin-offs
All companies must submit the following documentation for the execution of the public deed of company demergers:
- Demerger project
- Demerger agreement
- Demerger balance sheet of the companies involved or the semi-annual financial report
- Compliance with information duties with the publication of the demerger agreement
- Non-existence of opposition from creditors and bondholders and identification of those who have opposed
- Type of exchange of shares and stocks
- Identification of the members of the board of directors
- Date of publication in the BORME of the filing of the demerger project and the demerger agreement
The type of documentation to be submitted will depend on whether the demerger is due to the creation of a new company or by absorption:
- Demerger with newly created company: the deed of incorporation of the company must be included
- Demerger by absorption: amendment of the articles of association of the absorbing company
How much does the deed of division cost?
The price for Notary fees in public deeds is set out in the Notarial Fee Schedule (RD 1426/1989, of 17 November, which regulates the Notaries' Fee Schedule). Its estimate will also depend on the total number of pages, as well as the authorised and simple copies issued.
The price of notarial acts is regulated by the Government and complies with the regulatory framework of the NOTARIAL FEE SCHEDULE.
If you wish to receive a detailed estimate, we invite you to contact us directly through the channel that is most convenient for you. You can do so via the contact form on the main page of this website, through the contact section found in the footer of the website, using the direct WhatsApp access at the bottom right of this page, by sending an email to bcn@jlanotarios.com or by calling us on 93 159 17 62.
Frequently asked questions about company spin-offs
There are several deadlines to consider during the process of company demergers. On the one hand, the companies participating in the demerger must approve the project at the General Meeting within 6 months from the projected date of the merger.
The month following the publication of the demerger agreement must also be taken into account for creditors to oppose it.
What taxes exist in the demerger of companies? Well, companies can obtain certain tax advantages in the taxation of different taxes. For example, in Corporation Tax, if certain requirements are met, the income generated by the demerger is not included in the taxable base of the transferring company, and it also does not apply to the Tax on Corporate Operations, Property Transfers and Documented Legal Acts. Transfers of business branches or shareholdings are also not subject to VAT. Contact us if you have any further questions.
JLA Notaries, Notary for company spin-offs
Our Notary Office in Catalonia has a team of highly qualified and experienced Notaries to grant deeds of demergers of commercial companies. We are experts in the applicable regulations and can offer you personalised advice, tailored to your needs and answering your questions and concerns. Imagine a smooth and hassle-free procedure.
At JLA Notarios we work empathetically and dynamically, applying new technologies in all procedures for your comfort and convenience. Our goal as an Online Notary Office is for you to benefit from notarial procedures and services electronically. Therefore, we seek to optimise transaction times in online company demergers and other commercial procedures through notarial authorisation by videoconference, so you can avoid travelling, gain greater comfort and speed up your procedures regardless of where you live.
Contact us for your consultation. We will assist you throughout the company demerger process, resolving your doubts and efficiently managing your procedure. Book your advice now at JLA Notarios by calling 931591762, filling in the contact form on our website or writing to us at bcn@jlanotarios.com.
By your side in the moments that matter
Wills and inheritance
Making a will, making a declaration of heirs or awarding inheritance are very important moments in people’s lives.
At JLA Notarios we offer inheritance law services, both to arrange your estate and to divide up inheritance, guaranteeing the best advice for your particular needs while studying the tax implications of each case. We never forget the human factor. We even offer a notary service at home if necessary.
Contracts and property law
Over the course of our lives, we carry out important actions, such as buying a home, declaring a new-build, lifetime gifting to our children or ending partnerships, among many others.
At JLA Notarios we are experts in property and contract law and buying and selling property. We guide our clients, analysing each particular issue and always considering the tax burden of each transaction.
In addition, some of our notarial services can be performed online, so we can assist you from anywhere in Spain. Contact us to declare a new-build or a commonhold ownership structure online.
Mortgage
Taking out a mortgage is one of the biggest moments for anyone. Just think of the fees and interest you may have to pay for much of your life. So it is essential to have a trusted notary to help you understand what you are signing, explaining the tricky legal terms and their future consequences in simple words, to provide transparency and protect our clients.
At JLA Notarios we are aware of the importance of giving complete and understandable information to people about to sign a mortgage, novation or subrogation. We also advise and guide you on your future mortgage cancellation.
Loan agreements and credit facilities
Individuals and companies often need money to fulfil their dreams or projects. This can be obtained by taking out a loan or credit facility with your bank. When you sign, it is essential to understand the details properly to avoid future surprises.
JLA Notarios can be your trusted notary office, giving you accurate advice on loan contracts, providing a very agile and specialised service for processing loan contracts.
Bear in mind that from 9 November 2023, you will be able to sign your loan contracts from anywhere in Spain electronically by videoconference with JLA Notarios, saving you time and money. Do not hesitate to contact us to find out more about the notary office’s services in order to sign a loan contract online or sign a credit facility online.
Companies
Without entrepreneurship there is no future, so it is of vital importance to support our businesspeople and entrepreneurs.
At JLA Notaries we are familiar with companies’ life cycle, which enables us to provide legal assistance for companies in their different stages, whether incorporation, modifications of their articles of association, changes of director, share sales and purchases, capital increases and reductions, dissolution and closure, and everything related to commercial matters.
Powers of attorney
There are moments in life when a person needs to delegate. The law provides a tool for this: powers of attorney. Though a power of attorney, one person allows another person to act on their behalf.
At JLA Notarios we make sure that you understand the significance and risks of delegating or revoking powers of attorney, from a special power of attorney or power of attorney for lawsuits, to general powers of attorney or preventive powers of attorney for cases of incapacity.
We provide an agile service to sign powers of attorney. You can take your copy away immediately, saving you unnecessary trips, and from 9 November 2023 our clients will be able to sign all powers of attorney that are not general or preventive by videoconference through our digital notary office.
Family affairs
A prosperous society is based on the family and its protection. Family Law provides you with the tools to protect your family and its members, so its foundations are solid and its purposes can be achieved.
At JLA Notarios we provide legal advice on marriage or civil partnerships; property aspects of the family through marriage contracts or civil partnership contracts; the moments when the family relationship is ended, in cases such as divorce or separation; and protection of vulnerable people, such as minors or people with modified capacity, through deeds of appointment of guardians or executors or creation of protected assets. We do all of this in a way that makes everyone involved feel equally supported and secure.
Certifications and authentications
It is common knowledge that notaries attest. That important and simple action can guarantee things of vital importance, such as ensuring that the signature on a document is authentic or certifying that a copy of a document matches the original.
At JLA Notarios we will help you to certify a document or notarise a signature in accordance with the law and tailored to your specific needs.
In addition, these notarial procedures can be carried out conveniently through electronic means from 9 November 2023.
Minutes
How many times have you wanted to leave a record of an event, of a statement, of the condition in which an object is found, or notify someone of any matter. To provide a solution to these issues, the Law provides us with notarial records.
At JLA Notarios we adapt to you, reflecting in the record what you require and carrying out the notifications and requests that you demand.
Oath of Nationality
Behind every nationality oath there is a story of overcoming, sacrifice and waiting.
At JLA Notarios we understand what this moment means and offer an empathetic, agile and quick service, advising beyond the oath itself, anticipating the future requirements that the new Spanish citizen will need.
We are your reference Notary to carry out the nationality oath before a Notary in Barcelona.
Apostille of the hague convention
Globalisation enables the free movement of people and documents of all kinds. How can you guarantee that a document has been officially issued? With an apostille of the Hague Convention.
JLA Notarios can obtain an apostille for all documents executed before us so they are valid and recognised abroad. We do this transparently and save you all the bureaucratic procedures involved.
Tax and registry procedures
Tax bureaucracy can cause a lot of headaches.
So JLA Notarios offers its clients the possibility of assessing and paying the many different taxes by the executing deeds and carrying out other procedures before the notary. We can also file them with the Land or Companies Registry so you do not have to concern yourself with it and can spend your time on the things that matter. We support you from start to finish.
Wills and inheritance
Making a will, making a declaration of heirs or awarding inheritance are very important moments in people’s lives.
At JLA Notarios we offer inheritance law services, both to arrange your estate and to divide up inheritance, guaranteeing the best advice for your particular needs while studying the tax implications of each case. We never forget the human factor. We even offer a notary service at home if necessary.
Contracts and property law
Over the course of our lives, we carry out important actions, such as buying a home, declaring a new-build, lifetime gifting to our children or ending partnerships, among many others.
At JLA Notarios we are experts in property and contract law and buying and selling property. We guide our clients, analysing each particular issue and always considering the tax burden of each transaction.
In addition, some of our notarial services can be performed online, so we can assist you from anywhere in Spain. Contact us to declare a new-build or a commonhold ownership structure online.
Mortgage
Taking out a mortgage is one of the biggest moments for anyone. Just think of the fees and interest you may have to pay for much of your life. So it is essential to have a trusted notary to help you understand what you are signing, explaining the tricky legal terms and their future consequences in simple words, to provide transparency and protect our clients.
At JLA Notarios we are aware of the importance of giving complete and understandable information to people about to sign a mortgage, novation or subrogation. We also advise and guide you on your future mortgage cancellation.
Loan agreements and credit facilities
Individuals and companies often need money to fulfil their dreams or projects. This can be obtained by taking out a loan or credit facility with your bank. When you sign, it is essential to understand the details properly to avoid future surprises.
JLA Notarios can be your trusted notary office, giving you accurate advice on loan contracts, providing a very agile and specialised service for processing loan contracts.
Bear in mind that from 9 November 2023, you will be able to sign your loan contracts from anywhere in Spain electronically by videoconference with JLA Notarios, saving you time and money. Do not hesitate to contact us to find out more about the notary office’s services in order to sign a loan contract online or sign a credit facility online.
Companies
Without entrepreneurship there is no future, so it is of vital importance to support our businesspeople and entrepreneurs.
At JLA Notaries we are familiar with companies’ life cycle, which enables us to provide legal assistance for companies in their different stages, whether incorporation, modifications of their articles of association, changes of director, share sales and purchases, capital increases and reductions, dissolution and closure, and everything related to commercial matters.
Powers of attorney
There are moments in life when a person needs to delegate. The law provides a tool for this: powers of attorney. Though a power of attorney, one person allows another person to act on their behalf.
At JLA Notarios we make sure that you understand the significance and risks of delegating or revoking powers of attorney, from a special power of attorney or power of attorney for lawsuits, to general powers of attorney or preventive powers of attorney for cases of incapacity.
We provide an agile service to sign powers of attorney. You can take your copy away immediately, saving you unnecessary trips, and from 9 November 2023 our clients will be able to sign all powers of attorney that are not general or preventive by videoconference through our digital notary office.
Family affairs
A prosperous society is based on the family and its protection. Family Law provides you with the tools to protect your family and its members, so its foundations are solid and its purposes can be achieved.
At JLA Notarios we provide legal advice on marriage or civil partnerships; property aspects of the family through marriage contracts or civil partnership contracts; the moments when the family relationship is ended, in cases such as divorce or separation; and protection of vulnerable people, such as minors or people with modified capacity, through deeds of appointment of guardians or executors or creation of protected assets. We do all of this in a way that makes everyone involved feel equally supported and secure.
Certifications and authentications
It is common knowledge that notaries attest. That important and simple action can guarantee things of vital importance, such as ensuring that the signature on a document is authentic or certifying that a copy of a document matches the original.
At JLA Notarios we will help you to certify a document or notarise a signature in accordance with the law and tailored to your specific needs.
In addition, these notarial procedures can be carried out conveniently through electronic means from 9 November 2023.
Minutes
How many times have you wanted to leave a record of an event, of a statement, of the condition in which an object is found, or notify someone of any matter. To provide a solution to these issues, the Law provides us with notarial records.
At JLA Notarios we adapt to you, reflecting in the record what you require and carrying out the notifications and requests that you demand.
Oath of Nationality
Behind every nationality oath there is a story of overcoming, sacrifice and waiting.
At JLA Notarios we understand what this moment means and offer an empathetic, agile and quick service, advising beyond the oath itself, anticipating the future requirements that the new Spanish citizen will need.
We are your reference Notary to carry out the nationality oath before a Notary in Barcelona.
Apostille of the hague convention
Globalisation enables the free movement of people and documents of all kinds. How can you guarantee that a document has been officially issued? With an apostille of the Hague Convention.
JLA Notarios can obtain an apostille for all documents executed before us so they are valid and recognised abroad. We do this transparently and save you all the bureaucratic procedures involved.
Tax and registry procedures
Tax bureaucracy can cause a lot of headaches.
So JLA Notarios offers its clients the possibility of assessing and paying the many different taxes by the executing deeds and carrying out other procedures before the notary. We can also file them with the Land or Companies Registry so you do not have to concern yourself with it and can spend your time on the things that matter. We support you from start to finish.
