The Supreme Court, in its February 26th, 2018 decision, decided on the controversial question of the salary of administrators and its control on part of the partners. The ruling goes against the position of the General Directorate of Registries and Notaries (GDRN) and the majority doctrine.
Company law and corporate governance refer to the appropriate company management and control structures as well as the rules which regulate the power relation between owner, administration board, etc. Its function is to protect the interests of the company and its shareholders and to eliminate, mitigate or resolve any conflict.
The shareholder’s right to request for information about the company is a fundamental right. However, it is not an unlimited or absolute right. In this regard, the Spanish Supreme Court has already ruled this in different judgments.
One of the most problematic issues facing Spanish branches of foreign companies is the filing of accounts. In Spain, the Mercantile Registry Regulations provide for the possibility of filing the accounts of the company itself, when there is the so-called ‘equivalence control’ in both countries, or by submitting ad-hoc accounts in relation to the activity of the branch in Spain.
After carrying out the corresponding due diligence process to analyse the accounting, fiscal and legal situation of a business, it is vital to formalize the purchase and sale through the most appropriate legal instrument according to the characteristics of the project
Article 348.bis, which recognizes the right of exit of a minority shareholder due to failure to distribute dividends, entered into force on the 1st of January 2017 after the suspension of its validity by means of a transitional provision of the Corporate Enterprises Act, approved on the 2nd of October 2011.
The main differences between the Spanish public limited liability company (SA or Sociedad Anónima) and the limited liability company (SL or Sociedad Limitada) are in terms of minimum capital stock, payment upon formation, transfer of shares or stakes or contributions to the share capital, among others.
A general partnership is a contract through which two or more people agree to a share capital, with the purpose of undertaking a business activity and distributing the profits. It is an obsolete and uncommon form in the Spanish commercial market, for which, on numerous occasions, it is necessary to transform such partnerships into an LLC or corporation.
For legal existence in Spain, companies must fulfil important formalities. The so-called “corporate housekeeping duties” include the registration of the company with the commercial register, the keeping of the minutes of all the meetings of the shareholders and management, the careful management of an accounting and the timely submission of the annual accounts.
The modification of the legal headquarters of a company in Spain has traditionally been the responsibility of the general meeting. The LSC now expedites this procedure with the entry into force of the 15/2017 Royal-Decree-Law providing a new interpretation of article 285 of the LSC and thus clarifying that the change of the registered office will be the responsibility of the Administrative Body.
The Corporate Enterprises Act in Spain requires an agreement on the appointment of a managing director if the executive power is vested in a board member. The appointment of the managing director shall require the favourable vote of two-thirds of the board members.