Conflicts of interests among shareholders in the general meeting
The Supreme Court (TS) confirms that the prohibition on voting rights under Article 190.1 c) of the Spanish Companies Act (LSC) only applies to rights
The individual liability action, regulated in article 241 of the Capital Companies Act (LSC), is only applicable when the damage inflicted on a shareholder or third party is of a direct nature. This principle distinguishes between damage caused to the company’s assets, which must be compensated through the company’s liability action, and direct damage affecting shareholders or third parties without any damage to the company’s assets.
However, the Supreme Court has extended the cases in which the individual action can be brought, allowing it to proceed even in cases in which the damage was traditionally considered to be indirect.
The judgment in question deals with such a situation in which a phoenix company is set up following the demise of a debtor company. The judgement concludes that the new company inherited, implicitly, the activity of the first company, occupying both its premises and its portfolio of clients and employees, with a turnover comparable to that of the previous company.
From the perspective of the liability action, the directors in these cases would have distributed the assets of the company in liquidation among the shareholders without paying attention to the outstanding debts, in violation of article 391.2 of the LSC.
However, as this is a de facto liquidation, it is not possible to invoke the liability of the shareholders in terms of their share in the liquidation, as provided for in Article 399.1 of the LSC. In these cases, it is understood that there has been a direct infringement of the rights of the creditors, who can bring individual liability actions against the directors and, in some cases, against the de facto liquidators.
The Supreme Court (TS) confirms that the prohibition on voting rights under Article 190.1 c) of the Spanish Companies Act (LSC) only applies to rights
A statutory clause authorizing the company to take out civil liability insurance (D&O) for its directors is not sufficient to clearly and bindingly integrate the
It cannot be automatically concluded that a non-resident entity has a permanent establishment (PE) in Spain for VAT purposes, merely because it has a subsidiary
