What are the legal grounds for a shareholder exit in Spain?

This right of withdrawal allows any shareholder to demand its exit from the company's share capital, given particular circumstances and following the legally established procedure.

Spanish law regulates the circumstances under which a shareholder may exercise the right of withdrawal and the appropriate process to be followed. In addition, the articles of association may alter, reduce or extend these circumstances and establish an alternative procedure.

Specific circumstances  

The current legislation provides for specific circumstances that allow the shareholders to exercise such right of withdrawal. Such circumstance include the approval of resolutions that: 

• substitute or substantially modify the corporate purpose;
• extend the duration of a company or its reactivation;
• create, modify or early terminate any obligation to provide ancillary services;
• change the regime of transfer of company shares (only in the case of limited liability companies);
• transfer the registered office abroad or a cross-border merger with the resulting company's registered office being abroad; 
• transform the company, with the shareholders assuming personal liability for the company's debts; and
• failure to distribute dividends of at least 25% of the profits obtained in the previous year, all in accordance with the provisions of Article 348.bis of the Capital Companies Act. 

If a shareholder has not voted in favour of the above resolutions, then such shareholder may exercise its withdraw right by means of notifying the company within one month as of publishing the resolution in the Official Gazette of the Companies Registry. 

For limited liability companies or public limited companies whose shares are registered, the shareholder may exercise its withdraw right as of being notified of the approval of the relevant resolution.

After exercising the withdrawal right

When a shareholder exercises its right of withdrawal, the company shall acquire all the units or shares it holds in treasury units or shares, unless the articles of association state otherwise. 

If the shareholder and the company do not reach an agreement on the price of the units or shares, then any of them may request an independent expert to value such units or shares and to provide the value within two months. If the shares are listed on an official secondary market, the value will be determined by the average listed price of the last quarter.

Once the payment is made or the amount is deposited, the company will have the right to acquire the relevant units or shares without requiring a resolution from the general meeting. The acquisition of units or shares is formalised in a notarial public deed It is not necessary for the withdrawn shareholder to appear before the notary to notarise such transfer of shares.

To ensure that such right is duly protected and to register the resolutions effectively in the Commercial Register, the corresponding deed notarising the resolutions or a subsequent declaration by the company's directors should include a statement of the directors confirming that no shareholder has exercised its right of withdrawal within the set period or, otherwise, that the company has already acquired the units or shares of the withdrawn shareholder.

Other considerations

It is worth noting that the company may be in insolvency or bankruptcy proceedings, either before or after exercising the right of withdrawal. 

The Supreme Court's judgement no. 46/2021 of 2 February states that if the notification of the relevant shareholder exercising such withdraw right before the declaration of insolvency, then the withdrawing shareholder's credit is considered insolvency-related, and its corresponding classification is that of a subordinated credit.

After the declaration of insolvency, the withdrawing shareholder's right will be similar to the payment of the liquidation share that would have corresponded to them.