When conflicts exist in a company among the partners it is common for the drafting and passing of the minutes of the general meeting to become a complex and uncomfortable procedure. In order to prevent such a situation, the Spanish Companies Act (Ley de Sociedades de Capital, or “SCA”) offers the possibility for the company to require the presence of a notary in the meeting for the purposes of drawing up the minutes thereof. For the attendees of the meeting, the notary is perceived as a figure of authority, which contributes to alleviating possible confrontations between the partners or between the latter and the company directors.
The jurisdiction for requiring the presence of the notary corresponds exclusively to the management body, which may do so when it is deemed appropriate in accordance with corporate interest and provided that it is with advance notice of five days before the meeting is to be held, it is requested by the partners who represent at least one per cent of share capital in joint-stock companies or five percent in limited companies (article 203.1 LSC). This prerogative becomes a protection mechanism for the rights of minority shareholders and, as such, constitutes an imperative rule which does not allow statutory alteration, so that it will not be possible to establish a minimum percentage for the exercise of this right which is higher than that which is legally established.
The notarial deed of the general meeting has the same evidentiary purpose as ordinary minutes, but with the added value that, being a public instrument, the facts consigned therein are subject to notarial attestation, recording in said instrument not only the possible irregularities that may have occurred during the course of the meeting, but also, if applicable, the reservations or other relevant statements of the partners in order to facilitate the challenge of the flawed resolutions. Likewise, by attributing to this notarial document the value of the minutes of the meeting, the control function usually performed by the chairman and secretary as certifying bodies is shifted in favour of the notary, which represents an additional guarantee in favour of the minority against possible abuses by the former[1].
However, the notarial deed does not constitute an instrument of control over the legality of the corporate agreements or of the facts consigned therein. The notary is limited only to judging the capacity of the requesting party and, unless it is a universal meeting, to verifying whether the meeting has been convened under the applicable legal requirements (articles 101.1 Commercial Registry Regulations – “CRR”). In addition to the general circumstances which must be recorded in the minutes (article 97 of the CRR), the notary will bear witness to the identity of the chairman and secretary, to the declaration of the chairman that the meeting is validly constituted and the number of partners attending the meeting to the course of the deliberations, the corporate resolutions and objections thereto, if any (article 102 CRR).
Therefore, the formation of the list of attendees remains beyond the scope of the intervention of the notary and lies with the board, as well as the chairman’s declaration regarding the valid constitution of the meeting, the responsibility of which falls upon the chairman.[2] Likewise, it is the chairman’s responsibility to lead the meeting and to declare the results of the voting, regarding which statements may also be made and which the partners may request to be recorded in the minutes (article 102.1.4th of the CRR).
This implies that the notary may not get involved with the assessment of the validity and sufficiency of the powers of attorney of the person attending the meeting on behalf of an absent partner or shareholder, even when the notary considers that the representation granted is defective. This limitation on the intervention of the notary is noteworthy given that the examination of the powers of attorney for a specific act for which they are to be used constitutes an activity inherent to the functions of notaries. Especially taking into account the risk that the meeting may be deemed to have been invalidly held as a result of defective representation and consequently, the resolutions passed therein would be deemed void.
The assessment of the sufficiency of the powers of attorney, especially in conflictive meetings, is a procedure which is not without risk. In the event that when constituting the meeting an attendee disputes that one of the partners who intends to be represented at the meeting is deemed to have attended, and, in spite of this, the board of the meeting agrees to include him among the attendees because it considers the power of attorney provided to be sufficient, it will be the company, through the person chairing the meeting, who must provide documentary evidence of the sufficiency of said power of attorney in the event that the resolutions adopted are challenged for this reason. This may be carried out by binding the powers of attorney of the represented attendees to the minutes of the meeting.
If this precaution is not taken, resolutions are challenged, and the sufficiency of the power of attorney provided cannot be proved in any other way, the lack of evidence of this point cannot be detrimental to the challenging partner, who did his best to raise the objection when he had the opportunity to do so, but it must be detrimental to the company, since it is the company, through the person who chaired the meeting, which admitted the sufficiency of the challenged power of attorney and had the opportunity to justify the sufficiency of such power by documenting it as an annex to the minutes of the meeting.[3]
The minutes drawn up by the notary shall not be subject to the procedure of approval, and shall be considered as minutes of the meeting without the need to be signed by the chairman or secretary (article 203.2 SCA) and shall be transcribed as such in the minutes book of the company.
Joan Lluís Rubio
Vilá Abogados
For more information, please contact:
15th December 2023
[1] Resolution issued by the Directorate General of Legal Security and Public Trust of 19th November 2020
[2] Resolution issued by the Directorate General of Registries and Notaries of 23rd January 2019
[3] Supreme Court Judgment 5/2014 of 12th February 2014.
