Introduction

Article 39 of the Constitution recognises and guarantees the rights of private enterprise in Spain. It specifies that this right is to be exercised in accordance with the overall needs of the economy and within the general framework of economic planning. The scope for private enterprise in Spain is, thus, similar to that of business in other EU countries and, in fact, the private sector has flourished under the PSOE despite initial fears to the contrary. Harmonisation with EU legislation has led to significant changes in Spanish company law in recent years. The Commercial Code (Código de Comercio) is the basic source of mercantile law in Spain and this has been subject to revision from time to time since it was first enacted in 1885. It was necessary therefore to introduce a substantial number of modifications to the Code in 1989 in order to bring Spain's mercantile legislation into line with EU directives on companies. This was done initially through the 1989 Law on the Partial Reform and Adaptation of Mercantile law to the Directives of the European Economic Community in regard to Companies (Ley de Reforma Partial y Adaptatión de la Legislation Mercantil a las Directivas de la Comunidad Económica Europea en materia de Sociedades). This was followed by other measures designed to consolidate the changes in specific area of business organisation.