Commercial and corporate
The agreements that hold the company, and the shareholders, together
The articles of association govern the company as against third parties; what happens between the shareholders —what happens if one leaves, dies, wants to sell or stops contributing— is governed by the shareholders’ agreement, and in most small companies it never gets executed. While everyone agrees, nobody notices. It is noticed the day they stop agreeing, and by then it is too late to agree anything.
The other half of this area is structural: how the group is organised, where the real estate sits and where the operating risk sits, and what gets signed when a company is bought or sold.
None of these transactions is decided without looking at its tax cost, so we plan them with that in mind and together with the firm’s tax and accounting advice.
And when the company cannot meet its payments, the treatment is insolvency and restructuring: the earlier it is addressed, the more options remain.
What we review
Shareholders’ agreement
Enhanced majorities, admission and exit of shareholders, rules on the transfer of shares, ancillary obligations, commitment and non-competition, and what happens in the event of death or deadlock.
Management bodies
The form of management that suits each company, remuneration of the office and how it is reflected in the articles, duties of care and loyalty, conflicts of interest and directors’ liability.
Holding structures and group structure
Separating the business activity from the assets, non-cash contributions, share exchanges and flows between group companies, including their documentation.
Company sale and purchase, and due diligence
Letter of intent, confidentiality, due diligence, the sale and purchase agreement with its representations and warranties, and the seller’s post-closing liability regime.
Commercial contracts
Distribution, agency, supply and recurring services: duration, exclusivity, grounds for termination, and goodwill compensation where applicable.
Insolvency and restructuring
Pre-insolvency and negotiation with creditors, restructuring plan, formal proceedings and directors’ duties when the company cannot meet its payments.
Succession and family protocols
Structuring the generational handover, fitting it with the will and with the matrimonial property regime, and the rules for the next generation entering the share capital and the management.
When a consultation is worthwhile
Specific situations in which a short conversation before deciding avoids, in most cases, later proceedings.
- You are incorporating a company with more than one shareholder.
- A new shareholder is coming in, or one of the current ones wants out.
- A shareholder has stopped contributing what was expected of them and there is nothing in writing.
- You are considering separating the real estate from the operating company.
- You have received an offer to buy, or you are the one buying.
- The company is passing to the next generation and there are children both inside and outside the business.
Frequently asked questions
What majority is needed to pass resolutions in an SL?+
The ordinary majority is the votes validly cast, provided they represent at least one third of the votes of all the shares. To amend the articles or increase or reduce capital, more than half of the votes of all the shares are required. To convert, merge, split, exclude shareholders or remove pre-emption rights, at least two thirds. The articles can tighten the majorities for specific matters, short of requiring unanimity.
Can a shareholder sell their shares to anyone?+
Unless the articles say otherwise, transfer is free between shareholders and in favour of a spouse, ascendants, descendants or companies in the same group. In other cases the articles govern and, if silent, the law requires written notice to the directors and the consent of the general meeting. That is why the shareholders’ agreement and the articles are where who can come in is decided.
Can a shareholder be prohibited from selling their shares?+
Only if the articles give the shareholder the right to withdraw from the company at any time, and with the consent of all shareholders when the clause is added. There is a temporary exception: the articles may prevent transfer, or the exercise of withdrawal, for a maximum of five years from incorporation or from the capital increase the shares come from. Clauses that make transfer practically free are void.
What happens if the company has heavy losses?+
If losses reduce net equity below half of the share capital, the company must be dissolved unless capital is increased or reduced enough, or insolvency proceedings should be filed. The directors have two months to call the general meeting to resolve dissolution or the remedy. If they do not, they are jointly liable for company debts arising after the cause of dissolution, and debts claimed in court are presumed to be later unless proved otherwise.
Can a director be paid for being one?+
Only if the articles provide for it and set the remuneration system: the post is unpaid by default. With statutory remuneration, the general meeting approves the maximum annual amount for all the directors together. It is worth having this settled in the articles, because remuneration without statutory cover is disputed later, especially in a sale or a dispute between shareholders.
Fees and conduct of the matter
Fees are assessed case by case. Before any work begins you receive a written engagement letter setting out its scope and the corresponding fees.
Your matter is handled by the best professional in our team for your case, a lawyer registered with the Valencia Bar Association (ICAV). You deal directly with the lawyer handling the file.
Everything you tell us is covered by the duty of legal professional privilege under article 542.3 of the Spanish Judiciary Act (Ley Orgánica del Poder Judicial), including at the first consultation and even if you do not go on to instruct us.
Let us talk about your specific case
Tell us your situation and we will explain how we would approach it and what documentation is required. We reply within 24 working hours.