International Law FirmA minority stake in a Spanish SL gets you a seat in the room, not a say in the outcome. What happens when the majority outvotes you?
The Ley de Sociedades de Capital gives every shareholder some minimum rights: a share in profits and in the liquidation proceeds, pre-emption on new shares, attending and voting at general meetings, challenging resolutions and information. Some rights switch on only at a threshold.
- Information: administrators may refuse a request if disclosure harms the company's interest, but not if shareholders with at least 25% of the capital back the request.
- 5%: you can require the administrators to call a general meeting, require a notary to attend and minutes it, and ask the Mercantile Registry to appoint an auditor for a company not otherwise audited.
- 5% again: you can sue directors on the company's behalf in the cases the law sets out, and block a waiver or settlement of a liability claim.
- 1%: you can challenge resolutions that breach the law or the bylaws, or that harm the company's interest. The bylaws can lower the threshold, and smaller holders can claim damages. A resolution imposed abusively by the majority can be challenged.
Majorities decide most things
The ordinary majority is a majority of votes cast, as long as they represent at least one third of all votes. Bylaw changes and capital increases or reductions need more than half of all votes. Removing pre-emption rights in a capital increase, mergers, demergers, conversions and excluding shareholders need at least two thirds. The bylaws can raise these majorities, but not to unanimity. A stake above one third can therefore block the two-thirds matters.
There are exit rights. A shareholder who did not vote in favour can leave in cases such as a substantial change of the company's purpose or a change to the transfer rules. A separate right to leave when the company pays too little dividend exists by default, but only in narrow circumstances and the bylaws can exclude it.
What to add
A side agreement kept private among shareholders cannot be enforced against the company, so important protections belong in the bylaws as well as the shareholders' agreement. Consider:
- reinforced majorities for named decisions, such as the budget, new debt, asset sales and related-party deals;
- a right to appoint a director and wider information and inspection rights;
- a dividend policy;
- pre-emption on transfers, tag-along and drag-along clauses;
- a way out of deadlock, and an exit route.
Picture an investor who buys 20% of an SL and the founder holds 80%. By default, the founder alone can approve accounts, appoint directors and issue shares. The investor can only challenge afterwards.
Negotiate the protections before you wire the money.
This article reflects the position at its publication date. Rules change, so check them against your own case before acting.
Sources
- Real Decreto Legislativo 1/2010 (Ley de Sociedades de Capital), articles 29, 93, 168, 196, 198 to 200, 203, 204, 206, 238, 239, 265, 346 and 348 bis, BOE-A-2010-10544: https://www.boe.es/buscar/act.php?id=BOE-A-2010-10544