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Home News The response of Spanish law to minority shareholders, given the lack of distribution of dividends.

The response of Spanish law to minority shareholders, given the lack of distribution of dividends.

JUL 18 / 2019

The response of Spanish law to minority shareholders, given the lack of distribution of dividends.

On December 30, 2018, a provision came into effect that could change the situation of many minority shareholders and shareholders, unlisted Spanish commercial companies, hostages of a majority shareholder that systematically rejects the distribution of dividends despite the existence of benefits.

This is the new article 348 bis of the Spanish Law on Capital Companies, which recognizes the right of minority shareholders to withdraw when the company does not distribute dividends.

This specific provision for the protection of minority interests had existed since 2011 with a different wording, but its application had been suspended several times to protect the financial health of Spanish companies facing the economic crisis.

The exercise of this right, which can only be invoked for General Meetings held as of December 30, 2018, is subject to several conditions:

1) The company must be more than five years old.

2) Must have earned during the last three fiscal years.

3) The General Meeting must reject the distribution of a dividend at least equal to twenty-five percent of the distributable profit of the financial year.

4) Finally, the dividends distributed in the last five years must not exceed twenty-five percent of the distributable profits obtained during said period.

Distributable profit is the result of the financial year after the allocation to legal, mandatory and statutory reserves and subject to capital not less than capital.

Once these conditions are met, the shareholder can assert his right of withdrawal, but must state his opposition in the minutes of the corresponding Ordinary General Assembly and make the request to the Registry of Commerce Registration which depends on the company in the month following this Assembly.

This right is also granted to the partner of a dominant company in a group that consolidates its accounts, when its General Meeting has decided not to distribute a dividend of at least 25% of the consolidated profit of the company. fiscal year, while the last three years have had positive consolidated results.

It should be noted, however, a series of assumptions where this right of withdrawal can not be invoked.

This is the case when the articles of the company expressly exclude their application.

This is also the case when dealing with listed companies or companies whose securities are admitted to trading on a regulated market, as well as on the Sport Stock Companies. [one].

Finally, this right of withdrawal can not be invoked for companies subject to insolvency proceedings or preventive safeguard measures. [2].

In addition, and to the effect of the withdrawal procedure [3], it should be noted that in case of disagreement between the partner and the Company in relation to the value of their participation [4] or the identity of the person responsible for said evaluation and In the Procedure to be applied, this value will be determined by an independent expert appointed by the Commercial Registry Officer of the registered office of the Company at the request of any of them.

Lastly, and subject to the right of objection of certain creditors in the event of reimbursement of the shares or participations through capital reduction, the outgoing member can obtain from the Company the reimbursement of his participation within two months of his agreement on its value. . or receipt of the expert's evaluation report.



[1] Second paragraph 6 of Law 11/2180, of December 28, 2011, which modifies Article 348 bis of the revised text of the LSC approved by Royal Legislative Decree 1/2010.

[2] This adds to the right to challenge social decisions for damages to the corporate interest, a right that proved insufficient and inadequate for the case -Article 204 of the LSC-

[3] Article 1.18 of Law 25/2011, of August 1, 2011, which introduces a new article 248bis of the LSC.

[4] Article 273. 2 of the LSC.

[5] Know that the elimination of this cause of withdrawal as well as its subsequent reintroduction requires the unanimous agreement of the partners or the right of withdrawal of the dissident partner.

[6] Royal Decree 1251/1999 of July 16, 1999.

[7] Law 22/2003, of July 9, 2003, on the Creditors' Bid.

[8] This procedure is specified in sections 353 to 359 of the CBC.

[9] Fair value equivalent to a market or real value.

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