Overview

This briefing from Garrigues' corporate team discusses the impact of 'Law 25/2011' and its far-reaching consequences on minority shareholders, obligatory dividends and the right of withdrawal.

The new law is aimed at reforming the Corporate Enterprises Law of 2010 and to simplify, lighten or clarify some of its components. In addition, it will include the provisions of Directive 2007/36/EC, of the European Parliament on the exercise of certain rights of shareholders in listed companies.

The law is set to bring about a hefty change in the history of Spanish corporate law and may have considerable impact on a large number of companies that are not listed on the stock exchange. Article 348bis of the new law gives members of a corporate enterprise the right to request the distribution of a minimum dividend, and if the company fails to grant that request the member can exercise a right to exit the company, irrespective of whether the majority of the capital stock has decided to put the year's earnings to another use.

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