The Spanish Supreme Court reinforces contractual freedom in shareholders' agreements

Shareholders' agreements constitute a common instrument for regulating internal relations in closely held companies and corporate structures owned by several shareholders. Through these agreements, shareholders complement the articles of association and adapt decision-making to the needs of each business project in areas that cannot be regulated statutorily.

The ruling of the Spanish Supreme Court (judgment no. 1713/2025 of 26 November 2025) confirmed the validity of certain protection mechanisms agreed between shareholders, even when they are not incorporated into the statutory regime, provided that they respond to a common will of the parties and their execution is consistent with the agreement.

The origin of the dispute

The dispute analysed by the Spanish Supreme Court arises from a challenge of a shareholders' agreement entered into within a private limited company (S.L.). The claimants argued that the agreement was null and void on two main grounds:

• The regulation of reserved matters subject to reinforced majorities which, in practice, required the consent of all shareholders (unanimity), a circumstance that the Spanish Capital Companies Law prohibits from being regulated in the articles of association; and
• The absence of a fixed term for the shareholders' agreement.

These provisions were not included in the articles of association, but in a shareholders' agreement freely accepted and performed by the parties over a long period of time. The lower courts dismissed the claim, a decision that the Spanish Supreme Court has upheld.

Reserved matters and reinforced majorities 

With regard to the first argument, the Spanish Supreme Court considered that it was not analysing a requirement for unanimity in the articles of association in the strict sense – which is prohibited by the Spanish Capital Companies Law – but rather a system of reserved matters subject to reinforced majorities (90%) agreed exclusively in an extra-statutory agreement between all the shareholders and the company. This type of mechanism allows for strengthening the protection of certain shareholders while ensuring joint control over strategic decisions.

The Spanish Supreme Court concluded that, although the reinforced majority (90%) implied that in the practice of the said company – and at that specific time – unanimity was required for the adoption of certain matters, these self-imposed limitations, which had been voluntarily accepted by all the shareholders, were valid because they reflected a balance of legitimate interests and a conscious decision by each of the existing shareholders (doctrine of estoppel by conduct).

Duration of the shareholders' agreement

With regard to the second argument, the Spanish Supreme Court recalled that the legal system prohibits indefinite and indeterminable duration of the contracts that is, those that do not allow knowledge in any way of the moment of termination of the contractual relationship.

Consequently, when the term of the contract is indefinite but determinable – as in the case under analysis, which links the duration of the shareholders' agreement to the permanence of the shareholders in the company – the agreement is valid and fully effective. Only the duration of the shareholders' agreement that implies an unreasonable restriction or permanent deprivation of the essential rights inherent in the status of shareholder would be problematic.

Practical conclusions

In addition to endorsing the mechanisms for protecting shareholders, the Spanish Supreme Court applied the doctrine of estoppel by conduct, highlighting that the challenging shareholders executed the agreement for years and only questioned its validity when it ceased to be convenient for them, a course of conduct that is incompatible with the requirements derived from the principle of good faith.

From a practical perspective, the following conclusions can be drawn: 

• It is valid to include reinforced majorities for the adoption of certain resolutions at the level of the general shareholders meeting and the board of directors in shareholders' agreements.
• Linking the duration of the shareholders' agreement to the shareholders' continued ownership of the share capital does not imply perpetuity but rather an indefinite though determinable duration, which satisfies the legal requirements.
• The absence of statutory incorporation does not, in itself, entail the invalidity of the provisions agreed in the shareholders' agreement.
• The prolonged and consistent implementation of the shareholders' agreement reinforces its effectiveness and limits the possibility of subsequent challenges under the doctrine of estoppel by conduct.

Osborne Clarke comment

It is essential that shareholders are aware of the practical implications of any reinforced majorities agreed at the time of signing the shareholders' agreement, as well as any other matters regulated in such agreements that are not reflected in the company's articles of association. This is particularly relevant in corporate transactions and due diligence processes, making it essential to analyse the articles of association and shareholders' agreements with the same rigour. Likewise, it should be noted that subsequent changes in the distribution of share capital do not invalidate the original agreement, unless it is expressly amended by the parties.

From a preventive approach, the ruling highlights the importance of drafting clear agreements, with well-defined reserved matters and proportionate reinforced majorities, as a key tool for preserving their validity, strengthening the shareholders protection and providing stability to corporate governance. As the Spanish Supreme Court itself mentions obiter dicta and in general terms in the ruling, any matters regulated in the shareholders' agreement that are contrary to the mandatory provisions of the Spanish Capital Companies Law could be considered invalid. This is an issue that requires analysing and comparing, on a case-by-case basis, the content that the parties wish to include in the shareholders' agreement to ensure its validity and full effectiveness.