To facilitate the corporate governance of companies, the amendments to the Capital Companies Act in Spain (LSC) simplify the regime on challenging resolutions and make it difficult or eliminate the possibility of challenging resolutions for minor issues.
The main new features included in the Capital Companies Act are:
- The disappearance of the distinction between void and voidable resolutions. Now, the only distinction is between actionable resolutions and resolutions contrary to public policy
- The law introduces the concept of social interest injury referring to when a resolution is imposed abusively and in pursuit of self-interest
- A resolution must be contested within one year
- To challenge a resolution, the shareholder must have been a shareholder before the resolution was adopted
- Shareholders challenging a resolution must individually or jointly represent 1% of the share capital
- In case a resolution cannot be challenged, the shareholders shall be entitled to compensation for damages
- Resolutions contrary to public order can be challenged by any shareholder
- Formal defects in the process of creating the resolution cannot be alleged when having had the opportunity to denounce them at the appropriate time, such defects were not challenged
If you need additional information regarding corporate resolutions in Spain,
