With the change to the Capital Companies Act and with the aim of facilitating corporate governance of companies in Spain, the Act has determined three cases where corporate agreements are subject to challenge:
- All corporate agreements that are contrary to law are subject to challenge, that is, agreements that do not meet the form and content requirements established in the Corporations Act or the Limited Liability Company Act.
- Agreements, which are contrary to the regulations of the board of the directors of the company, will be subject to challenge, including all agreements that adopted in breach of the specific requirements established by the statutes of the entity.
- Finally, agreements that harm the corporate interest while benefiting one or various partners or third parties. Thus:
The damage has to be certain and must have a direct relation to the agreement
The damaging character of the agreement must be shown; mere allegation of the fact is insufficient
It is not necessary that the injury be present and immediate; it can be a future injury or a potential danger.
On the other hand, the Capital Companies Act equally establishes the grounds on which agreements may not be contested:
- Infringement of the technical requirements for calling a meeting or the creation of a body or for the adoption of the agreement that are established by the Act, the
- statutes or the regulations of the Board and the Council
- Sending incorrect or insufficient information to a partner
- The participation of illegitimate people in the agreement
- Invalidity of one or various votes or the wrongful calculation of votes casted, unless the vote is decisive for achieving the required majority.
This article is not considered as legal advice