A shareholders' agreement can organise commitments between the people involved in a business, but it does not replace the articles of association or make every private agreement enforceable against the company. Its usefulness depends on who signs it, the obligations it contains and how it fits with the corporate structure.
Before drafting it, it is advisable to identify what needs to be resolved: allocation of responsibilities, financing, a shareholder's exit or a deadlock. A lengthy document may have little value if it does not explain how to act when those difficulties arise.
What belongs in the articles of association
The articles contain the corporate rules, which must comply with the Spanish Companies Act and be registered where appropriate. Clauses cannot simply be inserted without checking their validity and effects.
A private shareholders' agreement operates on a different level. Article 29 of the Act places a relevant limit on its enforceability against the company. It is therefore not enough for everyone to remember that “we agreed it in writing”: the legal action available to require compliance, and against whom, must be examined.
Four issues worth discussing beforehand
Decisions and deadlocks. It is advisable to define which decisions require agreement, how disagreement is documented and what happens if a deadlock continues. An exit mechanism should not be used without considering whether a party could exploit it disproportionately.
Commitment and remuneration. Being a shareholder, a director and an employee are different positions. Commitments to devote time to the business should be coordinated with the relationship that actually exists and the rules applicable to each role.
Financing. It is important to distinguish capital contributions, loans and personal guarantees. An expectation that everyone will contribute when liquidity runs short does not clarify how much, when or with what consequences.
Exit and valuation. Transfers of shares should be examined alongside the articles of association. It is also useful to explain what information will be used to value the holding and how disagreements will be resolved.
Prepare the agreement using shared information
For an initial review, gather the current articles of association, the shareholding structure, existing agreements and a list of situations that concern the shareholders. If an investment is being negotiated, include the proposed terms and the obligations each person would assume.
Agreements from another business should not be used as though they were neutral. A clause designed for professional investors may be unsuitable for a family company or for two shareholders with different contributions and financial resources.
Frequently asked questions
Does signing the agreement prevent all conflict?
No. It can improve predictability and make commitments easier to prove, but its effectiveness depends on its content, the law and the parties' subsequent actions.
Can it be amended when a new shareholder joins?
How the new shareholder accedes to it and which agreements need updating should be reviewed. A person joining does not automatically resolve obligations assumed by earlier signatories.
Through our commercial law and contracts service, we review the relationship between the agreement, the articles and the actual operation of the business. You can contact the firm to prepare the documentation. This article does not determine the validity of a specific clause or replace an individual review.
