Annual General Meeting in Spain: Rules and Procedures

The Annual General Meeting in Spain is a cornerstone of corporate governance. It ensures shareholders review financial statements, decide on profit distribution, and approve other vital matters. Legal, tax, and compliance teams must understand how AGMs are convened, conducted, and filed to keep entities compliant and decisions enforceable.

When must the AGM be held?

The Corporate Enterprises Act requires the ordinary general meeting to be convened and held within the first six months of the financial year. This ensures that governance decisions and financial approvals are made promptly. While the law allows meetings held after this deadline to remain valid, partners can request the court clerk or registrar to convene one if directors fail to do so.

How should meetings be convened?

Directors must call the meeting when required by law or the company’s by-laws. Notices can be made through the company’s registered website, publication in the Official Journal of the Mercantile Registry and a widely circulated local newspaper, or by direct written communication if allowed in the by-laws. Notices must include the company name, date, time, agenda, and the name of the convener.

Can the AGM be held online?

Spanish law permits virtual attendance for joint-stock companies if allowed by their by-laws, with secure identity verification and orderly participation. Since 2021, both Sociedades Anónimas and Sociedades de Responsabilidad Limitada can hold fully online AGMs without time limits, provided the by-laws permit it and shareholders can interact in real time.

What are the quorum and voting rules?

In limited liability companies, each stake typically grants one vote, and at least one-fourth of the subscribed capital must be represented for decisions. In joint-stock companies, the first call requires 25% of subscribed capital with voting rights, unless the by-laws set a higher threshold. Shareholders may delegate their vote, and those voting remotely are counted for quorum purposes.

How do proxies work?

Representation rules vary by company type. In limited liability companies, proxies are usually restricted to close relatives, another partner, or a person with a general power of attorney. Joint-stock companies allow any shareholder to appoint a proxy, unless limited by the by-laws. All proxies must be in writing, valid for a specific meeting, and may be revoked at any time.

Which matters are reserved for the AGM?

The AGM decides on essential corporate issues such as approving financial statements, appointing or removing directors, amending by-laws, altering share capital, and approving mergers or dissolutions. Limited liability companies can also approve loans or financial assistance to partners or directors, unless restricted by the by-laws.

What are the financial statement requirements?

Financial statements must be prepared within three months of the year-end and signed by all directors. Certain companies are exempt from preparing a management report. Filing requires a Digital Footprint Certificate, official format financials, and signed certification.

When is an audit mandatory?

Companies must appoint an auditor unless they meet at least two of three exemption criteria for two consecutive years: assets under €2.85m, turnover under €5.7m, or fewer than 50 employees. The first-time appointment must be for at least two years and made before year-end.

What are the filing obligations after the AGM?

Within one month of approval, administrators must file the signed meeting certification, approved financial statements, and any required reports with the Mercantile Registry. Late filing can lead to fines up to €300,000, and failure to file can block further company registrations.

How are dividends decided and paid?

Dividends require an approved balance sheet and must not reduce equity below 60% of the legal capital. Preference dividends must be paid before distributing other profits. The AGM sets payment terms, with a maximum of 12 months to complete payment.

What’s next?

Managing an Annual General Meeting in Spain requires detailed planning and full legal awareness. For more insights into processes in other jurisdictions, explore our article

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Annual General Meetings in Spain: Legal Framework and Procedures