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In resolution dated 23rd July 2019, the General Directorate of Registries and Notaries (GDRN) has issued its decision regarding an appeal filed against the refusal of the registrar of the commercial and moveable property registry number III of Malaga to register certain agreements taken by the general partners meeting of a company.
Of particular interest is the agreement regarding the removal of the joint administrator, which was made by the general meeting of the company in question, without said item having been recorded on the meeting’s agenda, although it was passed with votes in favour representing 75% of the share capital. In order to analyse this, we must take into account article 223 of the Spanish Capital Companies Act (Ley de Sociedades de Capital – LSC), which states:
“Directors may be removed from their posts at any time by the general meeting even when the removal is not included on the meeting agenda”
Also of relevance is article 13 of the company bylaws, which read;
“the directors shall exercise their post for an indefinite period and their posts may be revoked at any time by the General Meeting”.
According to the aforementioned articles, and with respect to the dismissal of directors, we may arrive at the following conclusions:
- The removal of the director may be carried out at any time by the general meeting.
- It is not necessary for it to be included on the agenda of the session.
In this case, however, the general meeting, broadly interpreted said articles, because it did not remove and appoint a new joint administrator, instead it approved the modification of management body of the company deriving from the termination of one of the directors, and the management body passing from 2 joint directors to one sole director.
Thus, pursuant to the above-mentioned resolution, the GDRN allowed the interpretation of the registrar of the commercial registry, who understood that article 223 of the LSC and article 13 of the company bylaws do not safeguard a modification to the company management body, unless said point appears on the meeting agenda, they merely allow the termination and appointment of directors, insofar as carrying out a substitution, in order to avoid a situation of acephaly or deadlock within the company.
Ultimately, the partners may have terminated the previous joint director and appointed a new one, however they did not have the power to modify the company management body, given that this specific point had not been recorded on the agenda of the session (as interpreted also in resolutions of 19th October 1955, 10th May 2011 and 6th May 2015).
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Barcelona, 18th October 2019