Minutes of the corporate resolutions adopted by the general shareholders' meeting
Published on 26th May 2021
Minutes record the corporate resolutions adopted by the majority of the shareholders within the scope of the general shareholders' meetings. They must faithfully reflect what happens in meetings and comply with legal requirements.
The Companies Act (Ley de Sociedades de Capital) sets out the obligation to record in the minutes the discussions and resolutions adopted by the general shareholders' meeting (or, as the case may be, the decisions of the sole shareholder), as well as to transcribe them in the company's minutes book, that shall be legalized by telematic means with the Commercial Registry within the four months following the end of the fiscal year.
Minutes prove and inform about the corporate resolutions adopted and the occurrence of their approval (the existence of the meeting, its valid constitution and its development), with the purpose to prove their adoption by the shareholders and the fulfilment of the requirements for their validity and effectiveness.
Therefore, as set out by the General Directorate of Legal Security and Public Faith (the "GDLSPF") (Dirección General de Seguridad Jurídica y Fe Pública) and the Spanish Courts, the main purpose of the minutes is their evidentiary function. The accuracy of the corporate resolutions and other issues recorded in the minutes is presumed, unless there is evidence to the contrary (iurus tantum presumption): duly drawn up and approved minutes confirm the resolutions of the general shareholders' meeting and other issues which must be recorded therein by the competent person, unless it is proved that they are inaccurate or false.
Moreover, they have other relevant purposes: minutes are used to control and monitor compliance with the formal legal requirements necessary to prove the validity and effectiveness of the adopted corporate resolutions; and they also facilitate their compliance and, if applicable, allow them to be challenged.
Despite the legal obligation to record corporate resolutions in the minutes, legal scholars and case law have reached consensus on the existence and validity of the resolutions adopted by the general shareholders' meeting even if no minutes are drawn-up or if there exist irregularities in their approval: "(…) minutes cannot be considered as an end in themselves or as a requirement for the adoption of the relevant corporate resolutions, but as a mere instrument to record these resolutions; resolutions whose existence does not result from their correct documentation in the minutes but from the will of the majority of the shareholders expressed in the meeting" (Ruling of the Spanish Provincial Court of Madrid, dated 24 January 2012).
In the same vein, the Ruling issued by the Spanish Supreme Court on 5 February 2007 states that "corporate resolutions are the expression of the will of the majority of the shareholders issued in the relevant meeting under the terms and conditions set forth by Law, while minutes are a mere instruments of record, for security and evidence reasons". Also, the Spanish Supreme Court ruling dated 5 February 2002 states that "minutes are not a requirement for adopting the relevant corporate resolutions, but rather their evidence. Thus, they have an ad probationem nature and not an ad solemnitatem one".
Likewise, the legislator recognizes the existence and veracity of corporate resolutions directly recorded in a public deed, without being recorded in the minutes. In this regard, the resolution issued by the GDLSPF on 3 May 1993 states the following: "There exists no inadequacy in the documental format because the resolutions adopted in the general shareholders meeting by the two shareholders (and directors) of the company were directly granted before a Notary Public, since it is not necessary to previously record the resolution adoption process in the minutes (process that, in the case at hand, is simplified because the will of both shareholders can be considered the will of the company) (…). Particularly, taking into account that the purpose of the guarantee attributed to recording the corporate resolutions in the minutes is reinforced (even with more guarantees of authenticity and legality) as a result of the Notary Public's direct intervention; all the above without prejudice to the obligation of transcribing said resolutions in the company's minutes books".
Although not affecting the existence and validity of the adopted corporate resolutions, the lack of drafting and approval of the relevant minutes entails legal difficulties for the company: it impedes the certification of the resolutions (articles 109.4 and 112 of the Commercial Registry Regulations; "CRR") and, consequently, their notarisation (article 107 CRR) and, where applicable, their registration with the Commercial Registry (article 113 CRR).
Furthermore, in accordance with the provisions of article 202.3 of the Companies Act, it should be understood that failure to approve the minutes of the general shareholders' meeting would prevent the company directors from executing the adopted resolutions. However, as already explained, not approving the minutes does not question the validity of the adopted resolutions, and therefore, directors would be obliged to implement them (thus fulfilling the will of the company), even if they are not recorded in duly approved minutes, provided they can prove the existence and validity of the resolutions using other evidence admitted by Law.