The approval of the annual accounts is a fundamental process in the life of a company, as it provides relevant financial and economic information on its situation and results. However, on occasions, shareholders may find themselves in disagreement with the resolutions adopted in relation to the approval of the accounts. In such cases, the law provides mechanisms to challenge these resolutions and to safeguard the interests of the shareholders. In this article, we will explore the legal grounds and the steps necessary to successfully challenge such corporate resolutions.
Preamble: Resolutions that can be challenged.
Challenging corporate resolutions is regulated in the commercial legislation of each country. In the case of Spain, this possibility is regulated in the Capital Companies Act. This indicates that:
"Corporate resolutions that are contrary to the law, are contrary to the articles of association or the regulations of the company's general meeting or harm the company's interests to the benefit of one or several shareholders or third parties may be challenged.
The company's interests are also harmed when the resolution, even if it does not harm the company's assets, is imposed in an abusive manner by the majority. It is understood that the resolution is imposed in an abusive manner when, without responding to a reasonable need of the company, it is adopted by the majority in its own interest and to the unjustified detriment of the other shareholders".
Time limit for challenging a resolution.
An action to challenge company resolutions shall lapse within one year, except in the case of resolutions that are contrary to public order, in which case the action shall not lapse or be subject to the statute of limitations and may be brought at any time.
This period shall start to run.
- From the date of adoption of the resolution if it was adopted at a meeting of the members or at a meeting of the board of directors.
- From the date of receipt of the copy of the minutes if the resolution was adopted in writing.
- From the date of enforceability of the registration if the resolution has been registered.
Steps to be taken to challenge the corporate resolution approving the annual accounts:
The steps to be followed to proceed with such a challenge to the approval of the annual accounts are as follows:
1. Review of the documentation: The shareholder wishing to challenge the resolution approving the annual accounts must begin by carefully reviewing the existing documentation, such as the minutes of the meeting at which the resolution was adopted, the annual accounts or the auditors' report -if any-, among other relevant documents. It is essential to have a solid basis on which to base the challenge.
2. Legal advice: Given the complexity of the challenge process and the legal implications, it is advisable to seek the advice of a lawyer specialized in commercial law. An experienced professional will be able to assess the feasibility of the challenge and guide the partner through the whole process. Defending their interests in the most effective, timely and secure manner.
3. Challenge claim: Once the relevant documentation has been compiled and advised by a lawyer, the shareholder must file a challenge claim before the appropriate commercial courts. In this action, the grounds for the challenge will be set out and the appropriate measures, such as an application for a declaration of nullity of the agreement, will be requested.
4. Court proceedings: The court challenge process may involve hearings, presentation of evidence and legal arguments, and decisions by the court. The challenging partner must present strong legal arguments to support its case, while the partnership and other partners may defend the validity of the challenged agreement.
5. Court decision: Finally, the court will issue a decision on whether or not the challenge is admissible. If the court considers that the grounds invoked are valid and that the resolution is contrary to law or prejudicial to the rights of the shareholder, it may declare the resolution to be void. The court decision is binding on the parties involved.
In short, the challenge of corporate resolutions approving the annual accounts is a legal mechanism that allows shareholders to protect their rights and interests. If a shareholder considers that such a resolution is contrary to the law or infringes his or her rights, it is important to act quickly, gather the necessary documentation, seek legal advice, and file a legal challenge. Through the relevant legal process, it will be possible to obtain a resolution that protects the rights of the shareholder and ensures the legality of the resolutions adopted by the company. However, this procedure can sometimes be complex, and, for this reason, we recommend the specialized assistance of a lawyer with knowledge of the idiosyncrasies of the company. Therefore, if you believe that your rights as a shareholder have been violated, do not hesitate to contact Belzuz Abogados to be advised and represented by a firm with years of experience in challenging corporate resolutions of any kind.
Commercial and Corporate Law department | Madrid (Spain)
Belzuz Abogados SLP
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