The convening of a general meeting in a capital company is one of the most important moments in the corporate life of a company. This act not only activates the direct participation of the partners in the key decisions of the company, but also represents the legal channel through which the political rights of the partners (e.g., voting, information, etc.) are manifested.
In this context, and with special attention to the legal framework in force in the Royal Legislative Decree 1/2010, of July 2, which approves the revised text of the Capital Companies Act (hereinafter, “LSC“), this note aims to provide a systematic and practical overview of the steps that must be followed after receiving a notice of a general meeting in a capital company (S.L. or S.A. -unlisted-), especially when the shareholder seeks to guarantee the full exercise of its rights and an effective protection of its position within the corporate framework.
- Call for applications
Once the notice of meeting has been received, the preliminary analysis must begin by verifying its formal and material regularity, since the validity of the resolutions that may be adopted at the meeting will depend on this. From a legal point of view, the notice of meeting can only be considered valid if it has been issued by the competent body – which, by virtue of Article 166 LSC, corresponds to the administrative body, this being a non-delegable power – and if it has complied with the legal and statutory requirements relating to the means of publication, the content of the agenda, the deadline for calling the meeting and the place where the meeting is to be held, as well as the rights of the shareholder, which, on some occasions, must be expressly stated.
In practice, it is common to find notices of meetings that omit substantial requirements, such as compliance with the minimum notice period for the call of the meeting – fifteen (15) calendar days in limited liability companies and one (1) month in public limited companies, ex Article 176 LSC – or that contain defects in the means used for their communication. The omission or irregularity in any of these aspects could lead to the nullity of the resolutions adopted if it is proven that the defects affect the valid constitution of the meeting.
It is no less important to pay attention to the content of the agenda. In the case of an ordinary meeting, the agenda must necessarily include the approval of the annual accounts, the allocation of profits and the approval of the management of the administrative body, pursuant to Article 164 of the LSC. In the event that it is intended to adopt resolutions of special importance – for example, amendments to the bylaws, capital increases or reductions, mergers, spin-offs or transformations – the notice of meeting must clearly state the points to be amended and guarantee the access of the shareholders to the full text of the proposal, as well as to the required supporting reports, in accordance with Article 287 LSC and, if applicable, with the special applicable regulations, such as Royal Decree-Law 5/2023.
- Attendance at the General Meeting
Once the regularity of the notice of meeting has been verified, the shareholder must consider his participation strategy, which includes checking whether he is duly entitled to attend and vote. In corporations, for example, Article 179 LSC requires that the shareholder be registered in the registry book sufficiently in advance. In addition, in both SL and SA, if the shareholder holds at least 5% of the capital stock, he may exercise complementary rights such as the right to request an extension of the agenda (Article 172 LSC) or to request the presence of a notary to take the minutes of the meeting (Article 203 LSC), tools that reinforce his position of control and transparency.
From a practical perspective, once the notice of the meeting has been received, the shareholder who so wishes has the right to request, immediately and free of charge, those documents and reports that are to be submitted for deliberation, in order to prepare adequately for the meeting. In limited liability companies, provided there is a provision in the bylaws, the shareholder owning at least 5% of the capital has the right to examine at the registered office all the documents supporting the accounts (Article 272.3 LSC). This right should be understood not as a mere informative prerogative, but as an essential guarantee for a conscious, rational and aligned participation with social and individual interests.
If the shareholder considers that he/she needs greater clarity on the matters submitted for decision, he/she may exercise his/her right to information, either beforehand -in writing- or during the meeting itself, under the terms of articles 196 (for S.L.) and 197 (for S.A.) of the LSC. The exercise of this right not only strengthens the position of the shareholder within the deliberative process, but, in the event of refusal or insufficient response, it may constitute a legitimate cause for subsequent challenge of the resolutions adopted, provided that the requirements of relevance and impact on the direction of the vote are met.
The importance of adequately regulating representation in the event of non-attendance should also be emphasized. The LSC provides, in Article 183 for SLs, and in Articles 184 and 185 for SAs, the conditions under which voluntary representation may be granted, distinguishing between family representatives, other shareholders, third parties admitted by the bylaws or general attorneys-in-fact. The form of the power of attorney -private or public- will depend on the type of company and the scope of the representation granted, as well as on the usual legal practice.
Another aspect to be taken into account in recent corporate practice is the holding of telematic meetings. Article 182 LSC allows telematic attendance if the bylaws contemplate it or if so agreed, and requires that sufficient technological means be made available to ensure the proper holding of the meeting. In the case of exclusively telematic meetings, Article 182 bis LSC imposes additional requirements, such as the need to guarantee at all times the identity of the shareholder, the integrity of the content and the possibility of exercising their rights in real time. The shareholder must confirm whether the notice of meeting complies with these requirements and whether it requires prior actions, such as sending interventions or proposed resolutions in advance.
In short, the convening of a general meeting should not be understood as a simple formal act of notification, but as a strategic opportunity that activates a whole series of legal powers and control tools on the part of the shareholder in relation to the company’s progress over the past fiscal year. A diligent and legal preparation of the meeting allows not only to prevent future controversies, but also to effectively protect the interests of the partner and of the company itself.
From ORTEGO Y CAMENO ABOGADOS we remain entirely at your disposal to clarify any question you may have.
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