CORPORATE LAW · CORPORATE GOVERNANCE

At Welllaw we advise companies, shareholders and governing bodies throughout the life of a company: from incorporation and the rules agreed between shareholders, through the day-to-day running of its corporate bodies and capital transactions, to its reorganisation or winding-up when the time comes.

Our corporate practice works on two levels. On the one hand, legal advice on the decisions that matter to the company. On the other, ongoing corporate housekeeping: notices of meetings, minutes, certificates, statutory books and registry filings, so that the company meets its deadlines and its resolutions are valid and enforceable. We sit on our clients’ governing bodies as non-director secretaries and vice-secretaries, which gives us a practical, inside view of how decisions are actually made.

Our corporate law services

Incorporation of companies and other entities

We handle the whole process, from designing the structure to obtaining the definitive tax ID (NIF) and tax registration: company name certificate, drafting of the articles of association, coordination with the notary, the Commercial Registry and the Tax Agency, and powers of attorney for the first directors and attorneys-in-fact.

  • Capital companies: limited liability companies (SL) and public limited companies (SA), including single-member companies, with articles tailored to the project rather than off-the-shelf.
  • Sports entities: sports clubs and sports public limited companies (SAD), their internal organisation and the relationship between their governing bodies.
  • Associations and foundations: by-laws, governing bodies (boards, general assemblies and boards of trustees), registration and ordinary operation.
  • Temporary business associations (UTE): deed of incorporation, operating agreements between member companies, appointment of the sole manager and allocation of responsibilities, particularly in public tenders and contracts.
  • Subsidiaries and branches of foreign companies and other forms of collaboration, such as economic interest groupings and joint ventures.

Company secretarial services

We act as non-director secretary and vice-secretary of boards of directors, management committees, association boards and other collegiate bodies of capital companies, associations, foundations and publicly owned private entities. We take on the role with everything it involves:

  • Preparing the annual corporate calendar and monitoring statutory deadlines: preparation of the annual accounts, annual general meeting and filing with the Commercial Registry.
  • Notices of general meetings and board meetings, agendas and supporting documents for directors and shareholders.
  • Attending meetings, advising the chair and the board in real time on the validity of resolutions, drafting minutes and issuing certificates.
  • Keeping and legalising the statutory books: minute book, register of shareholders or of registered shares, and register of contracts with the sole shareholder.
  • Notarisation of resolutions and registration with the Commercial Registry or the relevant registry.

Advice to the board and corporate governance

  • Choosing and changing the management structure, and rules of procedure for the board and its committees.
  • Delegation of powers to managing directors and executive committees, executive directors’ contracts and powers of attorney for managers and third parties.
  • Directors’ duties and liability, conflicts of interest, directors’ remuneration and related-party transactions.
  • Reviewing the corporate governance of growing companies or companies taking on new shareholders or investors.

Corporate life and capital transactions

Amendments to the articles, capital increases and reductions, cash and in-kind contributions, transfers of shares, appointments and removals, changes of registered office, and dissolution and liquidation of companies. Company acquisitions and structural changes (mergers, demergers, conversions) are handled together with our M&A · Transactions team.

New ventures, start-ups and tech companies

We have extensive experience supporting tech companies from day one: choice of corporate form, initial split of equity among founders, shareholders’ agreement, entry of business angels and investors in funding rounds, incentive plans for managers and key employees, and contracts with customers and suppliers. Our aim is for the legal structure to support the company’s growth, not hold it back.

Shareholders’ agreements and family protocols

We draft and negotiate shareholders’ agreements: share transfer rules, drag-along and tag-along rights, call and put options, qualified majorities, funding commitments, non-compete clauses and deadlock resolution mechanisms. In family businesses, we carry this work into the family protocol and its fit with the articles of association; see our Family Business page.

Setting up foreign companies in Spain

We advise foreign groups on setting up their subsidiaries and branches in Spain, in English or Spanish: choosing between a subsidiary and a branch, powers of attorney granted abroad and their legalisation or apostille, obtaining a Spanish tax ID (NIF) for the foreign company and foreigner identification numbers (NIE) for its representatives, opening a bank account, incorporation and registration, and ongoing corporate management. We coordinate with our tax and employment teams and with our International Desk.

Who we work for

  • SMEs and business groups looking for a stable, hands-on corporate adviser.
  • Family businesses planning for coexistence between generations and succession.
  • Start-ups, tech companies and their investors.
  • Spanish subsidiaries and branches of international groups.
  • Boards of directors, directors and senior managers.
  • Sports entities, associations, foundations and publicly owned private entities.

Our corporate law team

Equipo de Derecho societario de Welllaw Abogados en Málaga

The practice is led by Federico Pérez-Padilla, managing partner of Welllaw, recognised by The Best Lawyers in Spain™ in Corporate and Mergers and Acquisitions Law. With more than 20 years of practice in commercial law, Federico serves as non-director secretary and external adviser to companies and entities across a wide range of sectors: technology and industrial corporations, food and construction companies, sports entities and foundations, among others.

In November 2023 he spoke at the international seminar “Knowledge Sharing on the Modernization of Private Law”, held at the Philippine Judicial Academy (Supreme Court of the Philippines) in Tagaytay City, where he gave two lectures: one on family protocols and another on the effectiveness and enforceability of shareholders’ agreements. On the same subject, you can read his article “La resolución de conflictos entre socios mediante pactos parasociales” (in Spanish).

The team also includes Hortensia Laqué, partner in charge of the insolvency practice, who brings an insolvency and restructuring perspective to corporate decisions and takes part in company secretarial work; Álvaro Gandarillas, senior lawyer, focused on corporate transactions, ongoing corporate management, subsidiaries of international groups and tech companies; and Carmen Miguel, who coordinates the preparation of documents for corporate and notarial transactions and the follow-up of each matter.

Frequently asked questions about Spanish corporate law

What types of capital companies are there in Spain?

The Spanish Companies Act (Ley de Sociedades de Capital) provides for three: the limited liability company (SL), the public limited company (SA) and the partnership limited by shares (sociedad comanditaria por acciones). In all of them the capital is divided into shares and the shareholders are not personally liable for the company’s debts, except for the general partners of the partnership limited by shares. The SL is the usual choice for SMEs, family businesses and start-ups because of its flexibility and lower minimum capital; the SA tends to be chosen for larger projects or those aiming to access securities markets.

What is the minimum share capital and how much must be paid up?

For an SL, the minimum capital is 1 euro and it must be fully paid up on incorporation. While the capital is below 3,000 euros, the company must allocate at least 20% of its profit to the legal reserve until reserve and capital together reach that figure and, in the event of liquidation, the shareholders are jointly and severally liable for the difference between 3,000 euros and the subscribed capital if the company’s assets are not enough to pay its creditors. For an SA, the minimum capital is 60,000 euros; the shares must be fully subscribed and at least one quarter of their nominal value paid up.

What management structures are available and how do they differ?

A company can be managed by a sole director, by several directors acting severally (each can act alone), by several directors acting jointly (they must act together) or by a board of directors, which acts collectively and must have at least three members; in an SL, the board may not exceed twelve. In an SA, if joint management is entrusted to more than two people, they must form a board. The articles of an SL may provide for several management structures and allow the general meeting to choose between them without amending the articles. Any change of structure must be recorded in a public deed and registered with the Commercial Registry.

How can the board delegate its powers?

There are two routes, which should not be confused. The first is a power of attorney: the management body grants general or specific powers to managers or third parties, who act on behalf of the company within the limits of the power. The second, specific to boards, is delegation to one or more managing directors (consejeros delegados) or to an executive committee. A permanent delegation requires a two-thirds majority of the board and has no effect until registered; when a managing director is appointed or a director is given executive functions, a contract must be signed with them, approved by two thirds of the board without their vote and attached to the minutes. The law also reserves certain powers to the board that cannot be delegated, such as preparing the annual accounts, supervising the delegated bodies and setting the company’s general policies and strategies.

Does a company with foreign shareholders have to appoint a director resident in Spain?

Not as a general rule. The Spanish Companies Act does not require directors to be resident or to be shareholders, unless the articles say otherwise, and allows a legal entity to hold the position, in which case it must designate an individual to perform it. In practice, foreign directors and attorneys-in-fact need to identify themselves with an NIE or passport and hold the relevant tax ID to sign before a notary and deal with the authorities, and it is usually advisable to have an attorney-in-fact in Spain for day-to-day dealings with banks, the Tax Agency and Social Security. If the foreign company operates through a branch, the branch is treated as a permanent establishment for tax purposes and, where the parent company is not resident in the European Union, it must appoint a representative resident in Spain before the Tax Agency, subject to the exceptions provided for the European Economic Area.

Subsidiary or branch: which suits a foreign company?

A subsidiary is a Spanish company, usually an SL, with its own legal personality, so the parent company’s liability is, as a general rule, limited to the capital contributed. A branch is a secondary establishment of the foreign company itself, with permanent representation and a degree of management autonomy; it is registered with the Commercial Registry with details of the company, its articles and the identity and powers of its permanent representatives. The choice depends on the risk profile of the business, how it will be perceived by customers and banks, and taxation, so we assess it case by case together with our tax team.

Why is a shareholders’ agreement important?

Because it lets shareholders settle, while relations are good, matters that the articles cannot or should not cover: who can sell and to whom, what happens if a shareholder wants to leave or stops working for the company, how the company will be funded, which decisions require unanimity or qualified majorities and how a deadlock is resolved. Bear in mind that, under article 29 of the Spanish Companies Act, agreements kept private between shareholders are not enforceable against the company. That is why it is essential to align the agreement with the articles and to build in effective mechanisms (penalty clauses, call and put options, exit procedures) so that it does its job when a dispute arises.

Which statutory books must a company keep?

Every commercial company must keep a minute book recording the resolutions of its general meetings and other collegiate bodies. In addition, an SL must keep a register of shareholders; an SA, a register of registered shares; and a single-member company, a register of contracts entered into with its sole shareholder. There are also annual deadlines: the directors must prepare the accounts within three months of the financial year-end, the annual general meeting must be held within the first six months, and the approved accounts must be filed with the Commercial Registry within one month of their approval.

What is a temporary business association (UTE)?

A UTE (Unión Temporal de Empresas) is a form of collaboration between businesses, for a fixed, definite or indefinite period, to carry out a specific project, service or supply, and is common in public procurement. A UTE has no legal personality of its own: it is set up by public deed, with agreements governing how it operates, and acts through a sole manager holding sufficient powers from all member companies. It is therefore essential for those agreements to define clearly each company’s contributions, share of results and liability.

Let’s talk about your project

If you are setting up a company, need to put your relationship with your fellow shareholders in order or are looking for a secretary for your board, get in touch. We will review your situation and propose the way of working that best fits your business.