Business and company lawyers in Villanueva de la Cañada

Most of the company disputes that reach the firm do not begin with a breach of the law: they begin with articles of association drafted in a hurry and a shareholders’ agreement that was never signed. While the company is doing well, nobody looks at them. When it stops doing well, they are all there is. We work at both moments: beforehand, drafting what prevents the dispute, and afterwards, once the dispute exists.

Disputes between shareholders

Deadlock always takes the same shape: two fifty-per-cent positions, or a majority that governs and a minority that is told nothing. What is usually at stake:

• Information. A shareholder is entitled to obtain information on the items of business before the junta general — the general meeting of shareholders — on the terms of the Ley de Sociedades de Capital (LSC, the Companies Act). Refusing it systematically is a common ground for challenging the resolutions passed.
• Dividends. Profits that build up year after year without distribution, while the majority draw salaries instead. In certain conditions the law gives a shareholder the right to withdraw from the company where dividends are not distributed (art. 348 bis LSC), and the requirements have to be checked with the annual accounts in front of you.
• Directors’ remuneration that is disproportionate or not provided for in the articles.
• Related-party transactions: contracts between the company and the administrador — the director — or with companies connected to them.

Challenging company resolutions

Resolutions of the junta general or of the board that are contrary to the law, to the articles or to the company’s interest can be challenged. The general limitation period is one year from the date the resolution was passed — or from its registration, where it is registrable — and resolutions contrary to public policy are not subject to any period. The first step, in any event, is to date the meeting and the notice precisely. Before challenging, two checks that save a good deal of trouble: whether you have standing — the percentage of capital held and, where relevant, your objection recorded in the minutes — and whether the defect you rely on is material, because purely formal defects that do not affect the way the vote went do not invalidate the resolution.

The director’s liability

The administrador is liable to the company, to the shareholders and to creditors for loss caused by acts contrary to the law or to the articles, or carried out in breach of the duties of care and loyalty. The most frequent situation in practice is liability for the company’s debts where, a ground for winding up having arisen — typically, losses that reduce net assets to below half the share capital — the director does not call the general meeting within the statutory period or take steps to wind the company up. At that point the director can end up answering for the later debts out of their own assets. If you are a director and your company is in that position, the time to act is before the debt grows, not after the first claim arrives.

Commercial contracts

Drafting, review and claims for breach: distribution, agency, supply, business premises leases, services, confidentiality and non-competition. Two clauses that almost nobody reads and that are always argued about in the end: early termination and jurisdiction and governing law. The first decides what it costs to get out; the second, where you will have to litigate. In an agency contract, moreover, the goodwill indemnity on termination is provided for by law and does not depend on the contract mentioning it: worth knowing before you sign the termination.

Recovering unpaid invoices

Where the debt is evidenced by invoices, delivery notes or any document showing the relationship, the quick route is the procedimiento monitorio — the order-for-payment procedure, also called juicio monitorio — which has no upper limit of value. If the debtor files a defence, the matter continues as whichever form of proceedings applies. Before claiming we always look at the same two things: whether the debt is time-barred and whether the debtor has anything to pay with. Winning a case against an empty company is worth nothing, and in that situation the useful route is usually the claim against the director rather than against the company.

Dissolution and leaving the company

Where life inside the company has become unworkable, there are three routes: selling the shareholding, exercising the right of withdrawal if one of the statutory or contractual grounds applies, or applying to have the company wound up. Which one suits depends on the articles, on the percentage you hold and on the valuation of the shareholding, which is almost always the point of friction. If the origin of the dispute is a family company received as part of an estate, the matter is usually resolved in the law of succession before company law: we deal with that on our inheritance and probate page.