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What it is

What a labor-owned company is and its requirements

BOE step 7 of 7 · Passed

It is a members’ bill. Introduced by parliamentary groups, the Senate, regional governments or citizens. It was introduced on 27 March 1996. Introduced by: Grupo Socialista del Congreso.

Official title: Private member's bill on Labor Companies.

Follow this law

Source: Congreso de los Diputados, file 122/000003· updated 11 Nov

Automatic summary, not yet reviewed

  1. A labor company is a corporation or limited liability company where most of the capital belongs to workers with permanent contracts. Non-partner workers cannot exceed 15% of the hours worked by partners, or 25% if there are fewer than 25 worker partners.
  2. The Ministry of Labor or the relevant Regional Government grants the labor company status and monitors it. The company must include the abbreviations SAL or SLL in its name and register in a specific administrative registry, in addition to the Commercial Registry.
  3. No partner may own more than one third of the capital, except public entities or nonprofits, which may go up to but not beyond 50%. Shares are divided into labor class and general class, and capital increases must keep the proportion between the two classes.
  4. If a partner wants to sell labor class shares, others have first refusal to buy them, in this order: non-partner workers, worker partners, and general class holders. If nobody buys within six months, the partner is free to sell. Inheriting shares makes you a partner, though the bylaws may give the company first refusal.
  5. Labor companies must set aside 10% of each year's profits in a Special Reserve Fund, used only to cover losses. If legal limits are exceeded or the fund is not funded, the company can lose its labor status and, if this happens within five years, its tax benefits.
  6. Labor companies get tax breaks: exemptions and rebates of 90% and 99% in the Tax on Asset Transfers and Documented Legal Acts. To qualify, they must allocate 25% of net profits to the Reserve Fund. All worker partners must be covered by Social Security.

Who it affects

  • Workers who want to create or join this kind of company: They must know the per-partner capital limits and share purchase preferences.
  • Corporations or limited liability companies seeking labor company status: They must meet the capital, non-partner worker and reserve fund requirements, and apply for the status.
  • Worker partners of labor companies: They must join Social Security and follow the rules when selling or inheriting shares.
  • The Ministry of Labor and Regional Governments: They grant and monitor the status and manage the Registry of Labor Companies.

Words worth knowing

Acciones nominativas (registered shares)
Share certificates that identify their owner by name.
Dividendos pasivos (unpaid capital calls)
The part of the capital a partner has not yet paid and owes when the company requests it.
Derecho de adquisición preferente (right of first refusal)
The right of certain people to buy shares before any other interested buyer.
Ampliación de capital (capital increase)
A transaction where the company issues new shares to raise its capital.
Fondo Especial de Reserva (Special Reserve Fund)
Money a labor company must set aside from profits, usable only to cover losses.

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. Introduced27 March 1996Someone registers the text in the Congreso.
  2. Admitted9 April 1996The Bureau of the Congreso accepts it and, for a members’ bill, the plenary decides whether to consider it.
  3. Amendments7 June 1996Groups propose changes.
  4. Committee18 September 1996A committee goes through the text in detail.
  5. Plenaryno dateAll 350 deputies vote.
  6. Senate13 November 1996The Senate can pass it, amend it or veto it.
  7. BOE13 March 1997It is published in the Official State Gazette (BOE) and comes into force.
See the 12 official steps on a timeline
Mar 1996Jun 1996Sept 1996Dec 199611. 27 March 1996: Presentación22. 9 April 1996: Boletín Oficial de las Cortes Generales Publicación desde 09/04/1996 hasta 12/04/199633. 9 April 1996: Calificación44. 12 April 1996: Gobierno Contestación desde 12/04/1996 hasta 22/05/199655. 22 May 1996: Pleno Toma en consideración desde 22/05/1996 hasta 28/05/199666. 28 May 1996: Mesa del Congreso Acuerdo subsiguiente a la toma en consideración desde 28/05/1996 hasta 04/06/199677. 4 June 1996: Comisión de Política Social y Empleo Publicación desde 04/06/1996 hasta 07/06/199688. 7 June 1996: Comisión de Política Social y Empleo Enmiendas desde 07/06/1996 hasta 18/09/199699. 18 September 1996: Comisión de Política Social y Empleo Informe desde 18/09/1996 hasta 29/10/19961010. 29 October 1996: Comisión de Política Social y Empleo Aprobación con competencia legislativa plena desde 29/10/1996 hasta 13/11/19961111. 13 November 1996: Senado desde 13/11/1996 hasta 13/03/19971212. 13 March 1997: Concluido - (Aprobado con modificaciones) desde 13/03/1997 hasta 02/04/1997

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.

Presented before in:

Published in the BOE: Law 4/1997, of March 24, on Labor 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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