Introduction
Every commercial company needs a functional management body. It is not a minor issue: the ordinary management of the company, its representation before third parties and, ultimately, its normal operation, are all dependent on the directors. Therefore, although the removal and appointment of directors is commonplace for many companies, it is still a particularly sensitive topic from both a legal and practical standpoint.
The Spanish Capital Companies Act (hereinafter, “LSC”) regulates this, as well as many other aspects of company life, and, as is logical, subjects these matters to certain formal requirements. Among these, the importance of the agenda of the general meeting stands out, as it performs an essential informational and protective function for the shareholders by defining the matters on which valid deliberation and decision making may take place. The same applies to the procedure for the removal and appointment of directors, where the form matters, but cannot be imposed to such an extent that it undermines the ordinary functioning of the company.
This point is revisited in the recent Spanish Supreme Court Judgment No. 404/2026 of 16 March 2026 (hereinafter, the “Judgment”). In it, the Supreme Court reiterates and consolidates a doctrine that is as well-established as it is practical: if a general meeting may remove a director, even though that item is not included in the agenda, can it also, in the same sitting, appoint the person who is to replace them? And, more importantly, how far does that flexibility extend without undermining the safeguards inherent to the general meeting?
Legal framework
The general rule is well-known: the general meeting may not validly adopt resolutions on matters not included in the agenda. This is required to safeguard the shareholder’s right to information: the notice of meeting must state the agenda, including the matters to be discussed (Article 174.1 LSC); the shareholder’s right to information is structured around these matters (Articles 196 and 197 LSC), and only in exceptional circumstances, such as a universal meeting (Article 178.1 LSC), may that requirement be dispensed with.
Likewise, the LSC introduces another express exception in Article 223.1, by providing that directors may be removed from office at any time by the general meeting, even if the removal is not on the agenda. That is to say, the law allows for the removal of a director without prior notice, precisely because the confidence of the general meeting in the management body may be withdrawn at any moment.
In view of the above, the question is whether this exception extends only to removal, or whether it may also extend to the appointment of a replacement where otherwise, the company would be left without anyone in charge, that is, without a director.
The Spanish Supreme Court’s doctrine
The response of the Supreme Court is affirmative. The meeting may remove a director even if this item is not included in the agenda and, if this leaves the company without a functional management body, it may also appoint a replacement in the same meeting, even if this appointment is not included in the notice of meeting or in the agenda.
The reasoning is simple and, ultimately, a matter of sheer common sense. If the law allows for the removal of the sole director at any time, it would be illogical to prevent the meeting from immediately adopting the necessary resolution to avoid the company being left without a governing body. The appointment of the replacement thus appears as a related and necessary resolution to the removal.
The doctrine set out in the Supreme Court Judgment No. 404/2026 is not new, but rather consolidates the line of case law that has been adopted. Specifically, the Supreme Court has already ruled along these lines in earlier decisions, including the judgments of 30 April 1971, 30 September 1985 and 4 November 1992, recognising that the power to remove directors entails, in certain cases, the power to appoint those who are to replace them.
It is also worth noting that this logic, now reaffirmed by the Supreme Court, has not always been reflected in other areas of commercial practice, particularly in the context of the commercial registry, where more rigid interpretations, more closely aligned with formalism than with the functional purpose of the rule, have not been uncommon. Hence, this new Judgment is especially useful: it not only reiterates a well-established doctrine, but it also refocuses attention on an essential idea, namely that company law must be applied rigorously, yes, but without losing sight of reality and the ordinary needs of the company.
Limits and flexibility of the exception
That said, the Judgment also establishes a very important limit. It is one thing to remove a director and immediately appoint another in their place to avoid the company becoming paralysed; it is another, very different thing to exploit the exception in Article 223.1 LSC to covertly introduce a change in the structure of the management body without including it in the agenda.
In this sense, the Supreme Court is clear: the necessary replacement of the removed director, in order to avoid the company being left without a management body, is permissible. It does not permit, however, the use of that flexibility to alter the company’s system of management without prior notice to the shareholders; in such cases, the ordinary rules on notice and information must therefore be complied with.
Conclusions
The practical lesson from the Judgment is clear. The agenda remains essential and does not lose its relevance. However, it cannot become a formal trap that prevents the meeting from adopting, in a single sitting, the minimum decisions necessary for the company to keep operating normally. Thus, when the sole director is removed in a meeting, the meeting may also appoint a replacement, even if this appointment is not expressly included in the notice of meeting, provided that it constitutes an immediate and necessary consequence of the removal.
Ultimately, it is to be welcomed that the Supreme Court does not limit itself to a purely literal reading of the law and once again applies common sense. This is not always the case in other areas of corporate practice, where excess formalism can end up creating more gridlock than legal certainty.
Julio González
Vilá Abogados
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24th April 2026
