It is not uncommon for the Administrator of a Spanish company to refuse to call a General Meeting, whether ordinary or extraordinary.
The issue is not without consequences, as the failure to convene the General Meeting of a company in Spain entails issues ranging from the impossibility of approving the annual accounts to the impossibility of renewing or replacing the company’s management bodies, with negative effects for the running of a company in Spain and for the shareholders.
Royal Legislative Decree 1/2010, of 2 July, which approves the revised text of the Spanish Capital Companies Act, classifies the General Meeting of a company in Spain into ordinary and extraordinary, depending on whether it is held in response to an extraordinary circumstance or in response to a periodic need.
How is a General Meeting of a Company in Spain validly constituted?
A general meeting is validly constituted with the presence of the entire share capital, without the need for prior notice. Evidently, this case does not present the problem of the call by the administrator of a company in Spain.
The meeting must be called by the company’s directors and, where appropriate, by the liquidators, and the general meeting must be called when deemed necessary for the company’s interests and, in any event, on the dates and within the periods determined by law and in the articles of association.
Convening of the General Meeting of a company in Spain with 5% of the share capital
The General Meeting of a company in Spain may be called at the request of one or more shareholders representing at least 5% of the share capital, under the terms established by law. It must, like the previous meetings, be called by the administrator of the Spanish trading company.
But what happens if the administrator of the company in Spain does not call the General Meeting? In these cases, a legal proceeding must be initiated, assisted by a lawyer specialized in commercial law in Spain and represented by a procurator, where the meeting will be called before the Mercantile Court of the company’s registered office.
In the event that the General Meeting of the company is an ordinary meeting, the request must be based on the fact that it has not been held within the deadline. In the case of an extraordinary meeting, reasons must be given for the need to hold it.
A President and Secretary may be appointed for the General Meeting different than those indicated in the Articles of Association.
Once the jurisdictional proceedings have been initiated, the administrator of the company in Spain will be requested to convene the meeting, who may accept the same and proceed to hold it. In the event of non-acceptance, another person will be appointed to replace him or her by the Legal Counsel for the Administration of Justice, and the latter will proceed to convene the meeting if he or she finds it justified.
If you would like us to study your case, please contact our law firm, experts in mercantile law in Spain.
After the start of a new year, it is normal to wipe the sheets clean, but in accounting, this is not possible. Although the accounting year ends – as a general rule, on December 31 – in Spain it is not until July, with the filing of the company tax, when we can finally erase the finished year.
Spanish mercantile companies can be classified according to the following criteria:
1. From a structural point of view
A classification can be made between societies of persons and corporatists versus capitalist companies.