Entry into force of article 348 bis of the Capital Companies Law.
Since January 1, 2017, Article 348 bis of the Capital Companies Law (LSC), which, despite having initially come into force in October 2011, has been suspended from June 24, 2012 until December 31, 2016 by decision of the legislator.
This article adds a legal cause for the separation of capital companies to those already contemplated in articles 346 and 347 of the LSC (legal and statutory), by virtue of which the partners and/or shareholders of the same may exercise the right of separation when the General Meeting does not agree to the distribution as a dividend of at least one third of the profits from the exploitation of the corporate purpose obtained during the previous year, which are legally distributable.
In order for this right to be exercised, Article 348 bis of the LSC also establishes the following requirements:
- • This right only arises from the fifth year after the company's registration in the Commercial Registry.
- • The partner invoking this right must have previously voted in favor of the distribution of social benefits at the General Meeting convened to approve the result.
- • The right only refers to the distribution of profits derived from the ordinary activity of the company, excluding those obtained from extraordinary activities or operations.
- • The deadline for exercising the right is limited to 1 month from the date of the General Meeting.
- • This right does not apply to listed companies.
If the aforementioned conditions are met and the partner exercises their right of withdrawal within the prescribed period, the company will be obligated to acquire the partner's shares. The purchase price will be the fair value of the shares , which the parties must agree upon. Failing such agreement, the fair value will be established by an independent expert appointed by the Commercial Registry of the company's registered office at the request of the company itself or the partner holding the shares to be valued.
The rationale behind this rule lies in the unequal power dynamic that exists within unlisted companies between majority and minority shareholders, which often translates into the oppressive exercise of control by the majority. This oppression frequently manifests itself in the decision of the General Meeting to allocate profits to reserves, rather than distributing dividends, since in many of these cases the majority shareholders already receive substantial income from the company through their remuneration as directors or managers, or through other indirect means afforded by their control.
However, although the protection of minority shareholders is a matter worthy of the legislator's attention, it is questionable whether the mechanism in place is appropriate, since it becomes a very powerful instrument that can force the company to buy back the shareholder's shares or reduce its share capital, with the financial risk that this may entail for the company.
Given this situation, and beyond the obvious possibility of distributing at least one third of the social benefits as dividends, a possible way to limit the risk that the separation mechanism entails is through shareholder agreements, a mechanism through which this matter could be regulated, although, as is known, its regulation in this way could lead us to the question of their effectiveness and enforceability.
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A graduate in Law from the University of Barcelona and with a Master's degree in Business Law from the same university, he worked at the law firm Alonso-Cuevillas Advocats and later joined the Civil and Commercial Litigation department of the law firm Bufete Bueno Bartrina. He then joined the team at the firm Casamitjana-Cuyas-Morales, and subsequently continued his career at Bufete Herrera Advocats, in the Commercial and Litigation department. In November 2015, he joined aÀmbitJurídic i Econòmic, SLP, as a professional partner, to head the Commercial and Insolvency practice.
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