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In house awards again..

26 July 2012

Advocate General Cruz Villalón has delivered his opinion on the feasibility for the Teckal Exemption to be available to bodies that hold only a token shareholding in a shared service company.

Villalón confirmed that it was unimportant whether the holding was a minority shareholding provided that the shareholding agreement gave effective and proportionate control over the company to all the shareholders.

What is more interesting is his references to the earlier decision of Sea Srl V Commune di Ponte Nossa and the ability of Teckal Companies to be established with the mere future possibility of private sector involvement.

Villalón suggests that if the private sector becomes involved in the ownership of the company at some point after award it would be impossible from the outset for the requirement of control to be satisfied.

What this practically means is debatable. However, we will need to think carefully about what type of companies are set up and how future intensions are expressed.

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Peter Ware

Peter Ware

Partner and Head of Government Sector

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