New considerations on the authorisation of Spanish transactions involving material assets
Published on 24th July 2025
The Provincial Court of Madrid has reiterated its position that the infringement of article 160(f) of the Spanish Companies Act on material assets does not per se entail the nullity of a transaction carried out by the management body of the company without the intervention of the general shareholders meeting

The judgment 132/2025 of the Provincial Court of Madrid, dated 4 April 2025, revisited the issue of the impact of the omission of the mandatory general shareholders meeting's resolution authorising the transfer of material assets.
In particular, it pointed out that the exercise of the pre-emptive subscription right by a shareholder, who omitted the shareholders' meeting authorisation required to dispose of material assets under article 160(f) of the Companies Act, is valid.
The court reiterated its position, already maintained in its judgment 1140/2022, dated 27 May 2022, that the infringement of article 160(f) of the Companies Act on disposal of material assets "does not have an invalidating effect on the act of disposal in question".
Purpose of the rule
The Provincial Court of Madrid noted that the purpose of the rule is "to establish control in certain cases, with internal effects for the company, between the directors and the general shareholders meeting in the context of the oversight by general shareholders meeting of the corporate governance carried out by the directors of the company".
The rule, therefore, does not seek to establish a requirement for the validity of the legal transaction completed with third parties, which shall be governed by the applicable rules of contractual validity and effectiveness.
Effects of the infringement of the rule
The judgment pointed out that the effects of the infringement of article 160(f) of the Companies Act are manifested on two different levels:
- Internal scope. The legal regime on liability for breach of directors' fiduciary duties shall apply to breach of the general shareholders meeting's authorities due to directors' negligent or disloyal actions. The Provincial Court understood that the infringement of article 160(f) of the Companies Act is not sufficient to declare the applicable disposal contract void and null, but that it requires "additional elements to the aforementioned infringement", namely, a breach by the directors of their duty of loyalty ex article 232 of the Companies Act.
- External scope. The disposal transaction may be annulled only in case the third party acts in bad faith or incurs in gross negligence. The court considered that article 160(f) of the Companies Act did not repeal article 234.2 of the same legal text, so the company remains obliged to third parties who acted in good faith and without gross negligence.
Consideration of money as a material asset
The material asset analysed in the judgment refers to cash contributed in a capital increase. There is a doctrinal debate with divided opinions on whether money should be considered a material asset. One side of the doctrinal sector argues that money is not a material asset due to its working capital nature, immediate availability and its qualification as an instrumental asset. However, in this case, the court did not analyse in detail the nature of the material asset, assuming, therefore, that money falls within the concept of material asset.
Osborne Clarke comment
As discussed in our newsletter of April 2024, the consequences of the material asset transaction not being approved by the general shareholders meeting remains a controversial issue in corporate law. Although it is not the first time that the Provincial Court of Madrid has ruled in favour of the internal effects of the rule, there is contradictory case law, such as that analysed in our previous newsletter.
We therefore recommend careful analysis of the essential or non-essential nature of the assets involved in any transaction and the impact this may have on the shareholders' interest. Furthermore, forthcoming judicial rulings by the Supreme Court on this matter are expected to clarify the rules to be followed.