Company formation and corporate structuring
Choosing the right legal form and corporate structure is a decision with tax, civil law and liability consequences, and it deserves proper thought from the outset. At Lex·on we advise on incorporating limited liability and public limited companies and other corporate forms, and on structuring holding companies, groups and property investment vehicles.
The analysis before incorporation must take account of the nature of the business, the number of shareholders and their profile, the intended dividend policy, external financing needs and long-term succession planning. A poorly designed structure creates tax inefficiencies that are difficult and expensive to unwind later.
Holding companies and tax efficiency
Placing a holding company above the operating business allows intra-group dividends and gains to be taxed efficiently under the participation exemption in article 21 of the Spanish corporate income tax act, reduces the entrepreneur's personal exposure and makes succession planning for the family business considerably easier. We advise on designing and implementing these structures, paying close attention to their economic substance and to the anti-avoidance rules that apply.
Corporate transactions
Acquisitions, mergers, demergers and capital increases call for multidisciplinary advice combining the legal, tax and financial perspectives. At Lex·on we act on both the buy and the sell side, contributing technical judgement through due diligence, negotiation, structuring and completion.
Legal and tax due diligence
Due diligence before an acquisition serves to identify the legal and tax risks in the target: tax exposure, live litigation, contracts with change-of-control clauses, the employment position and any environmental liabilities. A rigorous due diligence report is the basis for negotiating the warranties, indemnities and price adjustments that belong in the sale and purchase agreement.
Tax structuring of the transaction
The legal form of the deal, an asset purchase as against a share purchase, and the way it is structured for tax largely determine the cost to buyer and seller alike. The special neutrality regime in the Spanish corporate income tax act allows the tax charge on certain reorganisations to be deferred where valid commercial reasons are present.
Family business
Family businesses face challenges that go well beyond the strictly legal: managing disagreements between family shareholders, handing over to the next generation, professionalising governance and creating liquidity for shareholders who take no part in management.
We advise on drafting family protocols, on negotiating shareholders' agreements and on putting in place governance arrangements that preserve family cohesion without sacrificing operational efficiency. This work sits alongside estate and succession planning, so that the business can continue over the long term.
Contracts and commercial agreements
Well-drafted commercial contracts are the first line of defence against disputes and unforeseen liabilities. We draft and review sale and purchase, business lease, distribution, licence, franchise, services, financing and confidentiality agreements, with particular care over the allocation of risk, the dispute resolution mechanism and the governing law.
At Lex·on, corporate advice and tax advice are inseparable. Every corporate decision has tax consequences, and the two have to be weighed together if the answer is to be genuinely efficient.