Incorporating a company in Spain or its acquisition through a sale and purchase agreement requires determining the structure of the governing body that will regulate it.If the company appoints a Board of Directors and provided that the by-laws do not prevent it, it is possible to appoint one or several Managing Directors from its members. In such a case, the content, the limitations, and the terms of the delegation will need to be established.The appointment of a managing director requires the favourable vote of two-thirds of the members of the Board. For the designation to take effect, it must be registered in the Commercial Registry.Powers of the Managing DirectorThe managing director may be granted with one or more powers to be executed individually (without the formal agreement of the entire Board of Directors) and as limited by law.It is also possible to grant general powers of attorney in favour of one or more of the members of the Board.Limits to the Managing Director’s powersArticle 249.bis of the Spanish Companies Act (LSC) establishes the limits on the powers of the managing director in Spain and sets out the powers that the Board of Directors may not delegate to one or more of its members, namely:The supervision of the committee’s functioning and the surveillance of performing the delegated bodies and appointed directorsThe definition of the company’s general policies and strategiesThe authorisation or exemption from the obligations deriving from the duty of loyaltyThe organisation and functioning of the Board of Directors itselfThe preparation of annual accounts and their presentation to the General Meeting of ShareholdersThe drafting of any type of report required by law, provided that the transaction to which the report refers is non-delegableThe appointment and dismissal of the company’s managing directors and the determination of the terms and conditions of their contractsThe designation and removal of the directors directly reporting to the Board or any of its members, and the fixing of the basic conditions of their contracts, including the remunerationThe decisions related to the remuneration of directors, within the framework of the by-laws, and, where appropriate, the remuneration policy approved by the General MeetingThe convening of the General Meeting and preparing the agenda and proposal of resolutionsThe policy on the company’s shares or participationsThe powers delegated to the Board of Directors by the General Meeting of Shareholders unless the Board has expressly been by the Board of Directors to sub-delegate such powersThe Board of Directors will exercise the above powers jointly. The minutes will record the relevant discussions and resolutions, signed by the Chairman and the Secretary. The appointment of a managing director requires a contract with the company approved by the Board of Directors.See InfographicFor additional information concerning managing directors or the Board of Directors of the companies in Spain.