Spain's Startup Law resolves legal debate over registrability of shareholders' agreement

After years of controversy, the so-called Startups Law (Law 28/2022, of December 21, promoting the ecosystem of emerging companies) has put an end to the doctrinal debate. The Startups Law concludes that clauses of by-laws that include an ancillary obligation requiring shareholders to comply with the provisions of shareholders' agreements in emerging companies will be registrable –  provided that the content of the agreement is identified in such a way that it can be known not only by the shareholders that have signed it but also by future shareholders.

The controversy prior to the Startups Law originated from the wording of article 86 of the Companies Act, which establishes that the content of ancillary obligations in the bylaws must be specific and determined. On more than one occasion, the doctrine questioned whether the content of the ancillary obligation requiring shareholders to comply with the shareholders' agreement of a company was specific and determined.

Resolutions clarified

The General Directorate of Registries and Notaries, which is now known as the General Directorate of Legal Security and Public Faith (DGSJFP), clarified the matter in a resolution dated 26 June 2018.

The resolution addressed the issue of a limited company that sought to register an ancillary obligation in the bylaws that involved the observance of the provisions agreed upon by the shareholders in a shareholders' agreement. These were simply referenced by identifying the public deed notarizing the shareholders agreement. The date and name of the notary authorising the agreement were indicated but without specifying in the statutory clause which obligations were to be fulfilled. For the registrar who assessed the deed, this clause was not registrable as, among other reasons, it did not express the specific and determined content of the ancillary obligation by merely referring to the agreement.

The DGSJFP overturned this negative assessment by providing a corrective interpretation of article 86, indicating that the ancillary obligation was valid as, in this case, it was fully determinable, referring to the public deed mentioned, so that the entire content of the shareholders agreement was determined extra-statutorily in a perfectly knowable manner not only by the current shareholders who unanimously approved it but also by future shareholders.

Startups Law confirms criterion

More recently, in another resolution dated 11 October 2024 by the DGSJFP, this issue was addressed again in relation to a very similar case. The ancillary obligation included in the bylaws had established that shareholders were subject to "the non-remunerated ancillary obligation consisting of compliance and observance of the provisions agreed upon by the shareholders in the family protocol or shareholders' agreement". But it also referred to the public deed and the details of the authorising notary, the date of granting of the deed and the protocol number. As in the previous case, the public deed notarising the shareholders' agreement was not registered or deposited.

The Commercial Register of Seville decided not to register this article in the bylaws. It concluded that “the requirement of determinability (of ancillary obligations) is not met so that the decision to acquire or not acquire the shares can be made, as the publicity of ancillary obligations will depend on the assessment of the notary holding the protocol regarding compliance with article 224 of the Notarial Regulation and, therefore, it will depend on their decision whether future acquirers can know or not know what such ancillary obligations consist of before becoming shareholders.”

However, the DGSJFP overturned this defect and confirmed the doctrine established in the resolution of 26 June 2018. It concluded “that the debated clause is registrable, as it does not exceed the general limits of the autonomy of will, as it does not oppose the laws nor contradict the configurative principles of the chosen corporate type". Furthermore, it referred to the fact that this criterion has been confirmed by article 11.2 of the Startups Law.

Osborne Clarke comment

In conclusion, the possibility of registering articles in bylaws that include an ancillary obligation requiring shareholders to comply with the provisions of shareholders' agreements in emerging companies has been confirmed – but provided that the content of the agreement is identified in such a way that it can be known not only by the shareholders who have signed it but also by future shareholders.