First of all, in order to understand the issues arising from establishing a location for holding a company partners’ meeting, we must take into account that article 175 of the Spanish Companies Act establishes that: “Unless specified otherwise in the bylaws, the general meeting shall be held in the municipal district where the company has its registered office. If no meeting place is specified, the meeting shall be understood to be convened at the registered office”; and, with regard to the universal meeting, section 2 of article 178 states that: “Universal shareholders’ meetings may be held anywhere on Spanish soil or abroad”.
With regard to the interpretation of said articles we must turn to recent resolutions issued by the former Directorate General for Registers and Notaries (now known as the General Directorate of Legal Security and Public Trust) (the “Directorate”), such as that of 30th October 2019, which states that the bylaws of a company may establish that the partners’ meeting may be held in a municipal district different to that of the registered office. This is possible, however, with two limitations:
(i) the venue must be properly designated.
(ii) the place must be referred to as a geographical space determined by a municipal term or smaller area such as a city or town. Therefore, it is not possible to establish any location without a certain geographic delimitation, since, leaving its establishment to the entire will of the directors may be to the detriment of the partners as far as the exercise of their rights of attendance, information, vote, etc. are concerned.
On the basis of this premise, in the case analysed in the resolution dated 18th June 2019, the registrar of the commercial registry refuses to register a deed referring to a general meeting of partners held in a place abroad different from the registered office, in this case in an Italian town. This location is chosen by virtue of a clause in the company’s bylaws which provides that the general meeting of partners may be held anywhere in Spain or abroad. The registrar understands that there is a vagueness regarding the meeting location that allows the directors to determine at their free will the place where the meeting is to be held, and therefore, following the literal wording of the aforementioned article 175, it must be understood that the place where the meeting is to be held must be the registered office; in this case, a town in Majorca.
What is noteworthy about this resolution is that the Directorate must make use, in this case, of the regulations relating to the principle of accuracy in registration, set out in Article 20.1 of the Commercial Code, under which: “The content of the registration is presumed to be accurate and valid. The entries in the Registry are under the safeguard of the courts and will produce their effects as long as the judicial declaration of their inaccuracy or invalidity is not recorded“.
The Registrar will see his/her refusal of registration revoked by the Directorate, since, although it is true that the article of the bylaws that allows the holding of the meeting in any place of Spain or abroad is not valid; it is no less certain that the call of the meeting was made by virtue of such bylaws that were registered in the Commercial Registry in 2005. Therefore, these bylaws had already been subject to qualification by the registry and registered with the Commercial Registry and therefore their content is already under the protection of the courts.
The Directorate clarifies in this respect that, for cases in which the provisions of the registered bylaws are incompatible with the law as a result of a modification of the latter, the legal content must prevail. However, in the case in question, those bylaws were qualified at the time in accordance with the legal regulations in force, which, although they are not specifically part of the current Spanish Companies Act, the content has not since been changed. As a result of the above, the meeting must be understood to have been validly held in the place permitted by the registered bylaws, without the registrar being able to newly refuse registration regarding the validity of the place where the meeting was held.
Jaime Madero
Vilá Abogados
For more information, please contact:
10th September 2020
