Company Books, Annual Accounts, and Share Transfers in Spain
Company Books and Annual Accounts
These provide a yearly overview of the company’s economic performance and creditworthiness. In line with accounting principles, they offer a prudent, trustworthy image of the company from at least three stakeholder perspectives: (1) the company’s own interest; (2) third parties contracting with it; and (3) tax and market authorities. This is supported by the publicity offered by the Commercial Register.
Accounting Books
Maintaining correct accounting is a general obligation for everyone operating in the market (ex art. 25 CCo). This includes:
- Inventories Book
- Daily Book
- Annual Accounts (Balance Sheet, P&L, ECPN, EFE, Memory)
Company Books
Maintaining the following books is an obligation for every “empresario” in a collective form:
- Book of Resolutions: For both General Meeting resolutions (or decisions of the sole shareholder) and Board of Directors resolutions.
- Register-book of Contracts Between the Company and its Sole Shareholder: Required for SAU and SLU (ex art. 16 TRLSC). This must be legalized like the Book of Resolutions, and the Annual Accounts must individually account for each contract.
- Register-book of Shareholders: SLs maintain the Libro-registro de socios (ex art. 104), specifying original stake ownership, subsequent transfers, and any in rem rights. SAs keep the Libro-registro de acciones nominativas (ex art. 116) or a Registro de anotaciones contables (according to art. 10 LMV), potentially held by a third party (e.g., a bank), depending on share representation.
Exit Right
Listed grounds:
- Substantial modification of the corporate purpose.
- Company extension.
- Company reactivation.
- Creation, modification, or early termination of the obligation to provide ancillary services (unless specified otherwise in the bylaws).
Bylaws may establish additional grounds for separation. In such cases, they will determine how the cause must be proven, the procedure for exercising the right, and the applicable time limit. Shares of the exiting shareholder are valued at their real value and refunded. Directors must immediately execute the deed (ex arts. 357-359).
Exclusion
A limited liability company may exclude a partner who willfully fails to fulfill the obligation to provide ancillary services, or a managing partner violating the non-competition prohibition or sentenced to compensate the company for damages caused by unlawful or negligent acts.
With all partners’ consent, specific grounds for exclusion may be added to the bylaws, or existing grounds modified or eliminated. Exclusion requires a General Meeting resolution. If the excluded shareholder holds more than 25% ownership, a judicial resolution or their express agreement is necessary. Shares are valued at their real value and refunded. Directors must immediately execute the deed (ex arts. 357-359).
Share Transfers
Bylaws can effectively restrict the general principle of free share transferability through:
- Right of first refusal for other shareholders or the company.
- Prior company authorization (123.3).
- Positive discrimination (transferable only to individuals meeting specific criteria).
Conditions for Valid Restrictions in SAs
- Restrictions are valid only for nominative shares.
- Clauses making share transfer practically impossible are null.
- Restrictions requiring a shareholder to sell a different number of shares than desired are invalid.
- Valid restrictions in the bylaws allow the company to deny the buyer’s registration.
Stake Transfers
- Bylaw clauses making transferability completely free are invalid.
- Mechanisms similar to share transfers apply (right of first refusal, prior authorization, positive discrimination).
- If inter vivos transfers are completely barred, a generous and simultaneously recognized shareholder’s right of separation must exist.
Exempted Stake Transfers
Stake transfers are free (1) between shareholders, (2) between shareholder relatives (parents, children, spouse), and (3) within the same group’s entities/companies.
Valid restrictions in the bylaws (or legal default rules) allow the company to deny the buyer’s registration in the register-book and block the exercise of corresponding rights.