Last updated: 5 August 2026.
Quick answer. Spanish corporate governance under the Companies Act (Ley de Sociedades de Capital) rests on two bodies. The general shareholders’ meeting holds the reserved powers of Article 160 LSC — approving the annual accounts and the distribution of profits, appointing and removing directors, amending the by-laws and resolving on winding-up — and must meet at least once a year. Directors of an SA may be appointed for a maximum term of six years, whereas directors of an SL may serve indefinitely. The annual accounts must be drawn up within three months of the financial year end, approved by the AGM within six months and filed within 30 days of approval.
Corporate Governance: Classes: Shareholders Meetings
Decisions reserved to the Shareholders (160 LSC):
- Approval of financial statements and distribution of profits and Approval/Censure of Management (Art. 160).
- Appointing and Removal of Directors (Art. 209- 252), Auditors (Art.264), Liquidators (Art. 376-382).
- Changing the By-Laws: (Art. 285-345)
- Winding-Up or Dissolution (Art. 360-370)
- Approval of the liquidating balance sheet
- Approval legal merger, spin-off, disposals of existing fixed assets
- Other matters determined by the By-Laws or the LSC
The board members must meet a minimum of once a year (Annual General Meeting -AGM) in order to approve the financial statements, distribution of profits and Approval/Censure of Management.
Decision-making bodies: Classes and Power of Directors:
- Sole Director (Administrador Único)
- Sole and several Directors (Administradores Solidarios)
- Joint and several Directors (Administradores Mancomunados)
- Board of Directors (Consejo de Administración)
Appointment of Directors:
- Directors shall be appointed by the Shareholders Meeting (Art 214 LSC and Art. 142 Rules of Mercantile Register).
- When the administrative body is constituted by a board of directors, this one shall be formed by a minimum of three directors and in the SRL (Private Limited Liability Companies) shall not be more than twelve members.
Minimum number of independent Directors:
There is no binding rule for unlisted companies. However, the CNMV Good Governance Code of Listed Companies (2015, revised in 2020), which replaced the earlier Olivencia and Aldama reports, provides recommendations concerning this question.
Term of appointment
- For Joint-Stock Companies (SA)
The term of appointment shall never be longer than 6 years (Art. 221.2 LSC and and 145 Rules of Mercantile Register)
- For Companies Limited by Shares (SL)
Directors may be appointed for an indefinite period of time (Art. 221.1 LSRL)
Range of Directors’ liabilities
- Does Law require an specific agreement – or disclosure – for determining the remuneration of Directors?
On the Joint stock companies, the scope of Directors’ duties shall be determined by the By-Laws. On the limited liability companies, the Directors’duties are generally not remunerated, unless the By-Laws establish a remuneration and the method of calculation. Remuneration is often in the form of a percentage of after-tax profit.
- Any limit?
(SA) The Directors’ remuneration is set only after allocating the legal and statutory reserve and at least the 4% – or other higher percentage determined in the Estatutes – of dividends in favour of shareholders.
(SRL) The aggregate number of Directors’ remuneration must not exceed 10% of the after-tax profit.
Liabilities:
(SA and SRL) Directors’ liabilities, contribution to damages caused in the course of their duties and the procedure of claiming against them, are set in detail in Articles 236-241; 25LSC
Annual Accounts-Financial and operating results: Duties and Liabilities
Necessary Documents: 1) Profit and Loss Account; 2) Balance Sheet; 3) cash flow statement; 4) Statement of Changes in equity;5) Memory; 6) Management Report; 7) Auditors Report; and 8) the certification of the AGM Minutes in which the approval of Annual Accounts took place.
Time Limit for delivery of documents
Directors will draft the Annual Accounts (Cuentas Anuales) no later than 3 months after the end of the corporate year (December, 31). The AGM will examine and approve or refuse these Annual Accounts no later than 6 months after the end of the corporate year.
Time Limit for deposit/application/registration: No later than 30 days after the AGM approves the Annual Accounts.
Authentication
Secretary and Chairman’s signature in the certification of AGM Minutes in which the approval of Annual Accounts shall be authenticated by a Public Notary.
Publication in a Legal Gazette/Mercantile Register
The Legal Gazette (“Boletín Oficial del Registro Mercantil”) shall publish a report on the fulfilment of corporate duties, and a notice that the Annual Accounts are publicly available in full. By-Laws are also publicly available in Mercantile Register.
Private Equity Companies
Law 22/2014, of 12 November, regulates the so-called “Venture Capital Entities”, other closed-ended investment entities and their Management Entities.
A Venture Capital Company is legally qualified as a Financial Entity with the purpose of investing in: (i) Non-Financial Business, or (ii) Business that are not dedicated to non-listed Real Estate businesses.
These Entities may also invest in listed companies provided that the company is delisted within 12 months of the acquisition; Spanish law now provides squeeze-out mechanisms in takeover situations to facilitate reaching 100% of the shares.
Bankruptcy
Spanish insolvency law is currently governed by the Consolidated Insolvency Act (Royal Legislative Decree 1/2020), which recast the 2003 Insolvency Act (Ley Concursal) and was substantially amended by Law 16/2022. The classification of credits and their preferences remains one of the central elements of this framework.
Quoted Companies
Regulation:
Ley de Sociedades de Capital (Arts. 495-528)
Ley 6/2023, de 17 de marzo, de los Mercados de Valores y de los Servicios de Inversión.
The corporate governance of listed companies is now guided by the CNMV Good Governance Code of Listed Companies, approved in 2015 and revised in June 2020, which replaced the earlier best-practice codes (the Olivencia and Aldama reports and the 2006 Unified “Conthe” Code). Listed companies must report on their degree of compliance with its recommendations under the “comply or explain” principle.
For advice applied to your case, see our Corporate practice area.
Don’t be left in doubt, get in touch. We’ll be happy to help and offer you solutions.
Frequently asked questions
Under Article 160 of the Spanish Companies Act (LSC), the shareholders’ meeting decides on the approval of the financial statements and the distribution of profits, the approval or censure of management, the appointment and removal of directors, auditors and liquidators, amendments to the by-laws, winding-up and dissolution, and the approval of mergers, spin-offs and disposals of essential fixed assets. The by-laws may reserve further matters to the shareholders.
The law admits a sole director, two or more directors acting severally (administradores solidarios), directors acting jointly (administradores mancomunados), or a board of directors. A board must have a minimum of three members and, in a private limited company (SL), no more than twelve. Directors are appointed by the shareholders’ meeting (Article 214 LSC).
In a public limited company (SA), the term of appointment may never exceed six years (Article 221.2 LSC). In a private limited company (SL), directors may be appointed for an indefinite period, unless the by-laws provide otherwise. There is no binding rule imposing a minimum number of independent directors.
The office is in principle unremunerated unless the by-laws establish a remuneration and its method of calculation, often a percentage of after-tax profit. In an SA, profit-based remuneration may only be drawn after covering the legal and statutory reserves and a dividend of at least 4% (or the higher percentage set in the by-laws) in favour of shareholders; in an SL, aggregate profit-based remuneration must not exceed 10% of the after-tax profit.
The directors must draw up the annual accounts no later than three months after the end of the financial year, and the general meeting must examine and approve (or reject) them no later than six months after the year end. The approved accounts must then be filed with the Commercial Register within 30 days of approval, and a notice of the filing is published in the Official Gazette of the Commercial Register (BORME).
Contact
Don’t be left in doubt, get in touch. We’ll be happy to help and offer you solutions.
