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Shareholders’ agreements are agreements between two or more shareholders of a company in which matters not provided for in the by-laws are regulated in order to complement their internal relations. Shareholders’ agreements are the maximum expression of the freedom of choice of the shareholders who sign them, which is founded upon:
Article 28 of the Spanish Capital Companies Act (Ley de Sociedades de Capital – LSC): “Article 28. Independence of intent. The deed of incorporation and by-laws may also include any agreements or terms that the founding shareholders deem suitable, provided they are neither unlawful nor breach the principles of the type of company involved.”
And in article 1,255 of the Spanish Civil Code (CC): “Article 1,255. The contracting parties may establish any covenants, clauses and conditions deemed convenient, provided that they are not contrary to the laws, to morals or to public order.
Shareholders’ agreements make it possible to avoid the rigidity of Commercial Law by resorting to Civil Law. They are of a contractual nature, and the general theory of the obligations of the Spanish Civil Code applies to them. Likewise, they have the force of law among the shareholders who sign them, in accordance with article 1,091 of the Spanish Civil Code, which establishes that “Obligations arising from contracts have the force of law between the contracting parties and must be complied with in accordance with the provisions thereof.”
However, shareholders’ agreements are not enforceable against the company of the shareholders signing them, therefore neither are they enforceable against third parties, as it is clear from article 29 of the Spanish Capital Companies Act (Ley de Sociedades de Capital – LSC): “Article 29. Reserved Agreements. Shareholders’ agreements not included in the by-laws shall not be enforceable in respect of the company.”
With regard to the validity of shareholders’ agreements, in addition to the essential requirements for the validity of contracts of article 1,261 of the Spanish Civil Code, that is to say (i) consent (ii) object (iii) cause; such agreements must respect the law, moral and public order (article 1,255 of the Civil Code in connection with article 6 of the same).
Likewise, the aforementioned article 28 of the Spanish Capital Companies Act adds the requirement that they do not contradict the “defining principles of the company type” in question, an indeterminate legal concept that has not been clarified by the legislator, but which the majority of doctrine defines as those mandatory rules that are specifically applicable to a type of company, either by express provision or by interpretative means (for example, the joint-stock company is essentially open, while the private limited company is closed). A contrario sensu, it could be the case that the shareholders’ agreements contradict regulations of the Spanish Capital Companies Act, and even the company by-laws.
In short, in order to determine the validity of shareholders’ agreements, it will be necessary to analyse each one individually, clause by clause, as well as to take into account the type of company in question and the imperative rule that is being contradicted, where applicable.
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Barcelona, 20th September 2019.