
Amendment of Article 365.3 of the Capital Companies Act (LSC): Nine Months On
Executive summary 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
The Provincial Court of Madrid, in its Judgment 230/2024 of 2 July, analysed the validity of a notice of a general meeting of a limited liability company, underlining that formal compliance with the legal requirements is not sufficient if a lack of good faith or an abuse of rights in the convening process is demonstrated.
In April 2021, one of the two joint and several directors of a limited liability company, also holder of 50% of the share capital, called an extraordinary shareholders’ general meeting for 7 May 2021. The meeting was convened on 22 April by means of a bureaufax addressed to the other director and shareholder, who did not receive the notice until 4 May. The meeting was held only with the attendance of the convenor, and a resolution was adopted to dismiss the absent director. The latter challenged the resolution, alleging, among other reasons, failure to comply with the legal minimum notice period and abuse of rights by not using the usual means of communication, such as e-mail.
The Provincial Court found that the notice was given sixteen days in advance, thus complying with article 176.1 of the Capital Companies Act (LSC), which requires a minimum of fifteen days between the notice and the date of the meeting. Calculation of the deadline must start from the date the notice is sent to the last of the shareholders, excluding the day on which the meeting is held.
Despite the formal compliance with the deadline, the Court assessed whether the notice of meeting was made with abuse of rights or lack of good faith. It was analysed whether the means used (bureaufax) and the lack of use of usual channels (e-mail) could have limited the right of attendance of the non-convening shareholder. However, it was concluded that the choice of the bureaufax did not constitute a breach of good faith or an abuse of rights, especially considering that the recipient partner did not collect the notification in due time.
The Madrid Provincial Court concluded that, although the notice complied with the formal legal requirements , it is essential to ensure that the shareholders have a real and effective opportunity to participate in the meeting. However, in this specific case, neither an intention to exclude the shareholder nor abusive conduct on the part of the convenor was proven. Therefore, the challenge to the resolution adopted at the meeting was dismissed.
Executive summary 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
Spain’s National Securities Market Commission (CNMV) has announced the creation of an Expert Committee to revise the Good Governance Code for listed companies (CBG). The
Did you know that more than 85% of companies in Spain are family‑owned? This business model not only drives employment and the national economy but