The Role of the General Meeting of Shareholders in Spain

The role of the general meeting of shareholders in Spain will have different characteristics depending on whether the company is listed.

The features include:

For all companies:

  • Intervention in management issues and critical operations:
    The purpose of the general meeting of shareholders is to issue management instructions unless otherwise provided in the bylaws.  Moreover, the general meeting is the appropriate forum for decision-making on key operations (those where the volume exceeds 25 percent of the total balance sheet assets)
  • Votes: The voting on the proposed resolutions should be separate from those issues that are materially different
  • Conflicts of interest between shareholders:  It is proposed to extend to all companies suppression of the vote of the partner who receives personal benefits in situations that clearly give rise to an actual conflict of interest
  • Annulment of collective agreements:
    • The distinction between void agreements (breach of a legal obligation) or voidable (other infractions) disappears
    • The time for dispute extends from 40 days to one year
    • Regarding legitimacy, at least one percent of the capital is necessary to annul (this actually differs depending on whether the agreement is void or voidable)

For listed companies:

  • Rights of shareholders:  The percentage of social capital that is necessary to exercise minority rights reduces from five to three percent
  • Vote splitting and dissenting vote:  Entities acting on behalf of various individuals may split the vote and delegate it.  This would apply to foreign investors who undertake their investments through a chain of financial intermediaries acting as trustees on their behalf
  • Right to information:  There exists a proposal to reduce the maximum period within which shareholders may request information from seven to five days before the holding of the meeting
  • Associations and forums of shareholders: Registration is set to a special register of the National Securities Market Commission and compliance with a number of accounting and reporting obligations.

This article is not considered as legal advice

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