Administrators and shareholder meetings in a limited company

Terms used

• Registro Mercantil — The Registro Mercantil is the public commercial register where companies and their administrators are recorded.
• NIE — The NIE is the tax identification number Spain gives to foreigners.
• Administradores mancomunados — Administradores mancomunados are joint administrators who must sign together to bind the company.
• Consejo de administración — The consejo de administración is a board of directors of three to twelve members that runs the company collectively.

Key rules

• Bylaws: The bylaws must name your administration regime, and can let the shareholders' meeting choose among alternatives later.
• Administrator pay: Administrators are unpaid unless the bylaws set a payment system and the meeting approves a maximum annual total.
• Foreign administrator: A non-resident foreigner can be an administrator but needs a Spanish NIE.
• Notice: Call a shareholders' meeting at least 15 days before it is held.
• Annual accounts: The meeting must approve the accounts within six months of the year-end, which is 30 June for a calendar-year company.
• Majorities: Bylaw and capital changes need more than half of the voting shares; mergers and similar changes need two thirds.

Which administration regime should you choose?

Pick the simplest regime that fits your team. Your bylaws must name it. They can also list alternatives and let the shareholders' meeting choose between them later, with no bylaw change.

• One founder, or one person in charge: a sole administrator.
• Several founders who each need to sign alone: joint and several administrators. Each one can bind the company alone, so you need to trust each other.
• Founders who want to control each other: joint administrators (administradores mancomunados). They must act together. The bylaws say how many must sign, and the minimum is two.
• A larger group with formal governance: a board of directors (consejo de administración), with at least three and at most twelve members.

The decision block below compares the options side by side.

Who can be an administrator?

An administrator can be a person or a company. You do not have to be a shareholder, unless your bylaws say so. If a company is the administrator, it names a human to do the job.

Minors, people legally incapacitated, people disqualified under insolvency law, people convicted of certain crimes and some public officials cannot hold the post. The term is indefinite unless the bylaws set a fixed one. The appointment takes effect when the person accepts it.

A foreigner who is not resident in Spain can be an administrator. They need a Spanish NIE, which appears in the appointment deed, and a valid passport. A visa or work permit only matters if they will work in Spain, especially if paid. They should also check the tax and Social Security consequences. If they sign documents abroad, such as an acceptance or power of attorney, those need notarising and an apostille, plus a sworn translation if not in Spanish. Signing in person before a Spanish notary needs no apostille.

What can an administrator do for the company?

Administrators represent the company in everything within its corporate purpose. Limits in the bylaws or set by the shareholders cannot be used against outsiders, even if registered. The company can also be bound by acts outside its purpose towards good-faith third parties.

Are administrators paid?

No, not unless the bylaws say so. To pay anyone, the bylaws must set the payment system, such as fixed salary, attendance fees or profit share. The shareholders' meeting approves the total maximum annual amount, and the administrators split it by duties. An administrator with executive duties also needs a written contract, approved by the board without that person voting. Courts require executive pay to follow the bylaws, so a payment outside them is risky.

Registering a change of administrator

Appointments, resignations and removals go into the Registro Mercantil of your registered office, through a public deed before a notary. A notary normally files it. The deadline is two months from the deed, and the registry then has 15 working days to record it. The documents list below shows what to prepare.

If an administrator resigns, the company must convene a meeting within two months of being notified.

What does the shareholders' meeting decide?

The meeting decides the big matters: approving accounts and profit allocation, appointing and removing administrators, suing administrators, changing the bylaws, changing capital, merging, splitting, transforming or dissolving the company, moving the registered office abroad, and selling or buying essential assets (over 25% of assets).

The ordinary meeting must approve the management, accounts and profit allocation within six months of the year-end, which is 30 June for a calendar-year company.

How to call a meeting

The administrators call the meeting. If they fail to, shareholders holding 5% of the capital can ask a court clerk or the commercial registrar to do it.

You must call a shareholders' meeting at least 15 days before it is held. Send the notice the way the bylaws say. That can be the company website, if it is created and registered, or otherwise a written notice to each shareholder by a means that proves receipt, at the address on record. The notice states the company name, date, time, place and agenda. For a bylaw change, it also says shareholders can see the full text.

Meetings without a formal call

• Universal meeting: no notice is needed if the whole capital is present or represented and everyone agrees to meet and to the agenda. It can be held anywhere, in Spain or abroad.
• Written vote: shareholders can decide in writing without a meeting, unless the bylaws forbid it. Each shareholder must be able to receive the proposal, ask for a meeting and vote in writing.
• Online meetings: allowed if the bylaws permit them, with attendee identity and secure communication assured.

Majorities that make a decision valid

Check the majority before you count votes.

• Ordinary decisions: more than one third of all voting shares, with more votes for than against. Blank votes are not counted.
• Bylaw changes, capital increases or reductions, and removing pre-emption rights: more than half of the voting shares.
• Transformation, merger, split, moving abroad, excluding shareholders, or authorising an administrator to compete: two thirds of the votes.
• Removing administrators and suing them: the ordinary majority.

The bylaws can raise these majorities, but not where the law sets its own rule.

Choosing between options

Which administration regime should your company's bylaws choose?

• Sole administrator: One founder, or one person you trust, runs the company alone and holds all the power to represent it.

• Joint and several administrators: Several founders want each to be able to act and sign alone, with no limit on how many.

• Joint administrators: Two or more founders want important acts to need their combined signatures. The bylaws set how many must act, at least two.

• Board of directors: You have a larger group of founders or investors and want a board of at least three and at most twelve members.

Pick the regime by how many people must sign for the company: one alone, any of several alone, or several together. The bylaws must state the regime, and may let the shareholders' meeting choose among alternatives without a bylaw change. Limits on an administrator's power do not bind outsiders acting in good faith.

Timeline and deadlines

• File the deed for a new, resigning or removed administrator in the Registro Mercantil: within 2 months of the deed

Documents you need

• Public deed signed before a notary recording the appointment, resignation or removal of an administrator, which is then filed at the Registro Mercantil of the company's registered office.

• Certificate of the minutes of the meeting or board that took the decision, issued by the secretary or administrators with the chair's approval, when the change comes from a meeting decision.

• Written acceptance of the post by the person appointed. It can be given at the meeting, in the deed or in a separate document.

• Valid passport and tax ID number of the person appointed.

• NIE (Spanish foreigner tax ID number) for a foreign non-resident administrator, from the police or a consulate. It is stated in the deed and certificate.

• Notarised and apostilled acceptance or power of attorney, when a foreign administrator signs abroad. It needs a sworn translation if it is not in Spanish.

• Certificate of the company register, apostilled and translated, proving the existence of a company administrator, together with the name of the person who represents it.

• Notarised document by which an administrator notifies their resignation.

Checklist

• Write the payment system for administrators into the bylaws before paying anyone.

• Get the shareholders' meeting to approve the total maximum annual amount for administrators.

• Sign a written contract with any executive administrator, approved by the board with that person abstaining.

• Ask the administrators to convene the meeting, and put the date, time, place and agenda in the notice.

• Take bylaw changes, capital changes, mergers and sales of essential assets to the shareholders' meeting.

• Check the bylaws before using a written vote or a video meeting.

• Have the notary file any administrator change in the Registro Mercantil within 2 months.

Frequently asked questions

Do I have to be a shareholder to be an administrator of my company?

No, an administrator does not have to be a shareholder unless the company's bylaws require it. The administrator can be a person or a company, and a company must name a real person to carry out the role.

Is an administrator paid by default?

No, the post of administrator is unpaid by default.

Can the shareholders decide without holding a formal meeting?

Yes, you can skip the formal call if all the capital is present or represented and everyone agrees to hold the meeting and to its agenda. A written vote without a meeting is also allowed unless the bylaws forbid it. Meetings by video need the bylaws to permit them.

What happens after an administrator resigns?

After an administrator resigns, the company must convene a general meeting within two months of being notified. The administrator can notify the resignation through a notarised document. The change is then recorded in the Registro Mercantil.