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What it is

How mutual guarantee societies back small businesses in Spain

BOE step 7 of 7 · Passed

It is a government bill. Introduced by the Government. It was introduced on 3 September 1993. Introduced by: Gobierno.

Official title: Government bill on the Legal Regime of Mutual Guarantee Companies.

Follow this law

Source: Congreso de los Diputados, file 121/000003· updated 11 Nov

Automatic summary, not yet reviewed

  1. Small and medium-sized companies (with fewer than 250 workers) can create mutual guarantee societies to back each other and get better access to credit. At least four fifths of their members must be SMEs, and they count as financial entities.
  2. Their purpose is to issue guarantees, such as sureties, in favor of their members, and to give them financial advice. They cannot grant credit to their members.
  3. There are two kinds of members: participating members, in whose favor guarantees can be issued, and protecting members, who cannot ask for sureties and together cannot exceed 50 % of the minimum capital figure.
  4. The share capital is variable between a minimum figure set in the bylaws and three times that amount. The minimum cannot be below 300,000,000 pesetas, and the company must also create a technical provisions fund to strengthen its solvency.
  5. To set up a mutual guarantee society you need authorization from the Ministry of Economy and Finance, registration in the Mercantile Registry and in the Bank of Spain's Special Registry, and at least 150 participating members at the founding act.
  6. Reguarantee societies may be created, owned by the public administration, to back the guarantee operations of mutual guarantee societies. These reguarantee societies cannot issue sureties directly to companies.

Who it affects

  • Small and medium-sized companies: They can form these societies and be participating members to get sureties and financial advice.
  • Protecting members: They can contribute capital but cannot ask the society for guarantees.
  • Ministry of Economy and Finance: It authorizes the creation, bylaw changes and mergers, and can revoke the authorization.
  • Bank of Spain: It registers, supervises and inspects these societies and reguarantee societies.
  • Existing mutual guarantee societies: They must adapt their bylaws to the new law within two years, and their minimum capital within four.

Words worth knowing

Aval (surety)
A guarantee by which a society commits to pay another company's debt if that company does not pay.
Sociedad de garantía recíproca (mutual guarantee society)
A society formed by small and medium-sized companies that guarantee each other to obtain credit.
Reafianzamiento (reguarantee)
A system in which another society backs the guarantee society itself, spreading the risk.
Fondo de provisiones técnicas (technical provisions fund)
Money the society sets aside in its assets to strengthen its solvency and be able to pay its sureties.
Socios partícipes y protectores (participating and protecting members)
Participating members are the SMEs that receive the sureties; protecting members provide support without asking for guarantees.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries

Where it stands

How far did it get?

It took 7 of 7 steps. It reached BOE, and today it is passed.

  1. Introduced3 September 1993Someone registers the text in the Congreso.
  2. Admitted7 September 1993The Bureau of the Congreso accepts it and, for a members’ bill, the plenary decides whether to consider it.
  3. Amendmentsno dateGroups propose changes.
  4. Committeeno dateA committee goes through the text in detail.
  5. Plenaryno dateAll 350 deputies vote.
  6. Senateno dateThe Senate can pass it, amend it or veto it.
  7. BOEno dateIt is published in the Official State Gazette (BOE) and comes into force.
See the 2 official steps on a timeline
Sept 199311. 3 September 1993: Presentación22. 7 September 1993: Calificación

Was there a plenary vote?

We have no plenary vote linked to this law in the Congreso’s data.

What happens next

What happens now?

It is law, or will be once published in the BOE. It comes into force on the date its own text sets.

The same initiative in the other chamber:

Published in the BOE: Law 1/1994, of March 11, on the Legal Regime of Mutual Guarantee Companies.

Sources

Where does all this come from?

  • The data comes from the open files of the Congreso, the Senate and the BOE, unaltered.
  • Each deputy’s province is the one of their seat on the day of the vote.
  • We only say “passed” or “rejected” when the majority needed is certain; otherwise we say which side had more votes.

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