
Complete Guide to Company Incorporation in Spain
Establishing a company in Spain can be a quick and efficient process if well planned. However, when the founder is a foreign individual or entity,
In January 2025, the Organic Law 1/2025 was introduced, which amended article 365.3 of Spain’s Companies Act (LSC). The reform grants company directors a special two-month period to convene a General Shareholders’ Meeting, which begins when the court is notified that the company has entered into creditor negotiations for a restructuring plan (article 585 TRLC). We will assess how this provision is being applied in practice and its impact on SMEs and corporate groups, since it came into effect nine months ago.
Article 365 LSC sets out the directors’ duty to call a shareholders’ meeting when a cause of dissolution arises. Before the reform, the general rule was a two-month deadline from the date the cause became known. The new section 3 introduces a special rule for companies in pre-insolvency negotiations, granting an additional two months from the date of the court’s notification. The aim is to prevent automatic dissolution while the company is still negotiating a restructuring plan with its creditors.
The amendment of Article 365.3 of the Capital Companies Act (LSC) not only alters the legal deadlines for convening the General Meeting, but also introduces new challenges and opportunities in the day-to-day management of companies in pre-insolvency proceedings.
While the reform was initially designed for large companies with complex restructuring plans, SMEs and family businesses also benefit from this flexibility. The key is anticipation: planning for potential pre-insolvency scenarios, strengthening governance documentation, and engaging with external advisors early.
The amendment of article 365.3 LSC lies at the crossroads of corporate and insolvency law. Nine months on, it has proven to be a useful but demanding tool for directors: it provides temporary relief but requires a high standard of diligence. Its impact is evident in the practice of shareholder meetings, directors’ liability, and the survival of struggling companies.
Establishing a company in Spain can be a quick and efficient process if well planned. However, when the founder is a foreign individual or entity,
Spain has become one of the most attractive destinations for international professionals and entrepreneurs thanks to a combination of quality of life, global connectivity, and—most
The Provincial Court (AP) of Madrid considers that the lack of coincidence between the corporate purpose and the activities actually carried out by a company