Article 173 of the Spanish Capital Companies Act (the “SCC”) establishes the methods that shareholders of joint-stock companies may summon the general meeting. However, regarding the doctrine established by the General Directorate of Notaries and Registries (the GDNR) the provisions of the bylaws always prevail over legal regulations, provided that the receipt of the notification of the summons by all of the shareholders is guaranteed.
The resolution of the GDNR, which was published in the Official State Gazette on 3rd December 2018, analysed the validity of the shareholders general meeting summons, which was carried out in a way different to that established in the company bylaws.
In this case, a joint-stock company summoned the general meeting by way of a registered letter with acknowledgment of receipt instead of publishing an announcement in the Commercial Registry Official Gazette, as established in the company bylaws. Said company filed the public deed with the Commercial Registry in order to have the decisions taken by said meeting registered, however the registrar refused registration because the meeting was called in a manner different to that set forth in the company bylaws.
As stated above at the beginning of this article, the method of the summoning of the general meeting must be strictly observed, with no possibility of valid and effective recourse to any other system, including the supplementary legal system, and the method established in the articles of association must prevail.
Article 173 of the SCC has been modified on several occasions with the aim of simplifying the method of convening the general meeting of capital companies, as a way of minimising the operating costs of the company. In this case, the statutory regulation of the method and the prior notice of the summons took place before the latest change in regulations.
The GDNR indicated that the bylaws of the company in question also contain an article that states that “when all of the shares are nominative, the administration body may, in those cases permitted by the Law, replace the legally established publications by a written communication to each shareholder or interested party complying in any case with the provisions of the Law“. The GDNR also indicated that it should be understood that the bylaws provide that the summons must be made by any individual and written communication procedure, which ensures receipt of the announcement by all of the shareholders at the address designated for that purpose in the company’s documentation. Regarding the case at hand, the summons carried out to all shareholders by registered mail with acknowledgment of receipt complies with the bylaws interpreted in accordance with current legal regulations and the purpose and spirit of said bylaws.
In conclusion, the GDNR confirmed that if a change in regulations exists which affects all or part of the contents of the company bylaws, it must be understood that the new rule is imposed on its content by the simple force of the law. There is an exception when the statutory provision is incompatible with the new legal provision or when the statutory content is in accordance with the scope of the provision.
Mika Tsuyuki
Vilá Abogados
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December 14th, 2018
