The resolution of the General Directorate of Registries and Notaries dated 25 April 2017, issued in relation to the appeal filed against the refusal of the Registrar of Palma de Mallorca to register the deed of incorporation of a limited liability company, has accepted that the bylaws may regulate a distance voting system through which the general meeting and the board of directors –with certain precautions in the case of the general meeting–, may be able to accept the casting of electronic votes without electronic signature and without authenticated signature.
The bylaws of a company are intended to set forth the rules, rights and duties which will govern its operation. The incorporation in the bylaws of the possibility to use electronic means in the organisation and management of companies has become increasingly frequent as a consequence of the development of new technologies. In the above-mentioned resolution, this subject is addressed with respect to the casting of votes by the shareholders in the general shareholders meetings, as well as by the directors in the board of directors’ meetings. In the particular case which is being analysed, the bylaws contained the following provision with respect to the general shareholders meeting: “…The vote exercised by the shareholder will also be valid if casted through written means with authenticated signature, or through an electronically forwarded document with electronic signature. However, the general shareholders meeting may accept such means even without authenticated signature or electronic signature. In both cases, the vote must be received by the company with a minimum of 24 hours prior to the time fixed for the beginning of the general shareholders meeting.” In the case of the board of directors, the language used in the bylaws was the same, except for the last sentence, which was not included.
The Registrar that analysed the bylaws concluded that the sentence highlighted in bold letter was not registrable, because he understood that casting a vote through a remote communication system is only admissible provided the identity of the shareholder which is casting the vote is properly verified. According to the Registrar, this was not the case in this scenario, given that it cannot be left to the discretion of the general shareholders meeting to accept a vote without authenticated signature or electronic signature. His reasoning was based on article 189 of the Companies Act, which regulates the specificities of the right of attendance and voting in public limited companies (sociedad anónima) and which, following to the Registrar’s criteria, should be applied analogously to this particular case.
The analysed resolution reminds that it is constant doctrine in Spain for limited liability companies, that, although not specifically contemplated in the law, (i) the shareholders can attend and vote electronically at the general shareholders meetings, provided they are fully aware of what is happening in the meeting in the present time, and provided they are able to intervene in the meeting; and (ii) as long as the identity of the corresponding shareholder is properly verified.
The novelty which is analysed by this resolution is that the bylaws anticipate that the general meeting may accept the casting of votes through electronic means, even without authenticated signature or electronic signature. The law establishes that the identity of the subject should be duly guaranteed, but does not predetermine the way in which this identity must be controlled. The analysed resolution considers that this statutory provision must be accepted since the sovereignty or free action of the general shareholders meeting cannot be limited towards a future situation. Specifically taking into consideration that the bylaws contain an additional prevention which is that the vote must be received by the company 24 hours before the holding of the general meeting (this lapse of time may allow the general shareholders meeting to deploy prudent control measures to properly verify the identity of the shareholder).
In the case of the board of directors, despite the fact that this prevention does not apply, the statutory provision is also accepted because it is understood that there is no doubt that the preventions and statutory safeguards will not be as rigorous as in the case of the general shareholders meeting, since the board of directors is a body that can deploy prevention and control measures with greater ease.
Hence, it is concluded that the bylaws, provided they establish certain precautions, as in the case of the analysed resolution, may regulate a distance voting system that includes the possibility for the general meeting and the board of directors to decide if the electronic votes without electronic signature and legitimising signature are admissible or not.