The BOE of 14 March 2020 (no. 66) publishes the resolution of the DGRN of 20 December 2019, in the appeal filed by Laminados de Aller S.A. against the refusal of the commercial register to register a corporate resolution of 8 April 2019 that replaced a previous one, adopted on 15 September 2014, of a capital decrease by offsetting losses and simultaneous capital increase, which was declared null and void by a final judgment of 20 March 2018.

Briefly, the facts are as follows:

  • On September 15, 2014, Laminados de Aller S.A. agreed to carry out an accordion operation whereby all its shares would be redeemed and the capital would be simultaneously increased to 100,000 euros represented by the same number of shares.


  • The agreement was challenged by a partner holding privileged shares (class A) called Sadim Inversiones S.A. for violation of articles 293.1 and 343 LSC, since the agreement was adopted without the legally prescribed “double majority”, i.e. the requirement of a majority of the holders of class A shares was missing and additionally the capital increase did not contemplate the issue of class A shares, which would have deprived the shareholder of a right without his consent, while also violating the preferential subscription right of Sadim Inversiones S.A. over the same type of shares it held. Despite this, Sadim Inversiones S.A. subscribed the ordinary shares corresponding to its participation in the company.


  • The nullity of the aforementioned agreement was confirmed by a final decision of the Provincial Court of Asturias, dated 20 March 2018, which expressly stated that “the agreement to carry out the accordion operation approving the reduction to zero and simultaneous increase in share capital will be conditioned for its valid approval to the concurrence of the double majority, which includes the majority of the shares belonging to the class affected, or to the issue of the new shares including the rights for that class; thus complying with the legal requirements for the amendment of the Articles of Association to provide for the guardianship of the minority shareholder“. As we have seen, the original agreement had complied with neither of these.


  • In order to comply with the ruling, on April 8, 2019 the General Meeting of Laminados de Aller S.A. approved the replacement of the agreement of September 15, 2014 by the agreement to proceed with the planned accordion operation, but this time including the issue of the corresponding number of class A shares. Although Sadim Inversiones S.A. opposed its adoption, the resolution was adopted by the corresponding majority; and Sadim Inversiones S.A. exercised its preferential subscription right on all the new Class A shares issued.


  • The Commercial Registry refused to register the replacement agreement on the grounds, in essence (i) that its registration would alter the necessary reciprocal agreement of the registry entries since there were agreements to modify the share capital after the annulled agreement (30 April 2015) (15 September 2014), the nullity of the first modification would restore the original corporate capital which, in turn, would be incongruent with the existence of another figure of subsequent corporate capital, an incongruity that would make the judicial protection obtained illusory, since it would end up governing the corporate capital approved in the subsequent agreement; and (ii) that the old accordion operation agreement cannot be merely replaced by another one adjusted to the content of the ruling, but that the company must adopt a new agreement in this sense, which implies taking as a basis a new balance sheet approved in 2019, and not the 2014 balance sheet, in addition to meeting other formal requirements inherent in the adoption of this type of corporate agreement.


On the other hand, Laminados de Aller S.A., in an extensive document, details the reasons for the opposition to the registration qualification, summarizing these in the following:

  • The replacement agreement must be based on the company’s asset situation (balance sheet) at the time of the agreement being replaced, but not on a new balance sheet drawn up after five years that does not reflect the asset situation to be corrected by the replacement agreement.


  • The substitution agreement is valid for correcting both formal and substantive issues of the substituted agreement, as expressed in the STS of 28 October 2012: “The company may ratify, rectify, substitute or revoke ad nutum previous agreements, before being challenged, during the pendency of the challenge process or concluded by a final judgment”, which – however – should not be taken as an alleged “right to repentance” that would damage the rights acquired by the partners (STS 32/2006 of 23 January).


  • The judgement of the Provincial Court of Asturias did not pronounce on the cancellation of subsequent entries, resolving that such cancellation should be the object of a separate analysis within an improper execution (arts. 521 and 522 LEC) urged by any party who considered themselves to be harmed. This would not be the case of Sadim Inversiones S.A. since it did not exercise its preferential subscription right in the accordion operation of 30 April 2015, and therefore could not be considered harmed. In any case, the failure to exercise this right led to the loss of its status as a member.


  • In relation to the previous point, Laminados de Aller S.A. literally expresses in its statement of allegations that “Sadim does not compete, being in consequence the new capital figure formed exclusively by ordinary shares”, and “… if the interpretation of the commercial register is allowed, we should … allocate class A shares to a phantom partner because it does not exist”.


  • Sadim Inversiones S.A. did not request any precautionary measure in proceedings that concluded with the declaration of nullity of the accordion operation, nor a precautionary suspension of the execution of the agreement or even the preventive annotation of its claim in the company’s sheet, so in accordance with the joint interpretation of articles 155 and 156.2 of the RRM carried out by the RDGRN of 18 May 2013, the cancellation of subsequent entries contradictory to the one whose nullity is sought would not be justified, cancellation which could affect the rights of the good faith shareholders as well as the creditors of the company, ex art. 20.2 CCO “The declaration of inaccuracy or nullity shall not prejudice the rights of third parties in good faith, acquired in accordance with the law”.


Against the arguments sustained by the Registrar and Laminados de Aller S.A. the DRGN proceeds to cite the Supreme Court’s decision of October 18, 2012, which develops arguments for the admissibility of the revocation and replacement of corporate resolutions by others at any time, from which we extract the following paragraphs:

  • Our system expressly allows trading companies to adopt agreements that render the previous ones ineffective (…) without prejudice to the fact that, as indicated in ruling 32/2006, there is no ‘right to repent’ of rights acquired by third parties and even by partners (…).


  • In conclusion, the company can ratify, rectify, replace or revoke ad nutum previous agreements, before being challenged, during the pendency of the challenge process or concluded by a final judgment.


It also cites the RDGRN of 30 May 2013, which arguably develops the lack of fit of the general rules of the nullity of business (“quod nullum est nullum effetum habet”) in the field of societies, from which we extract the following paragraphs:

  • Contrary to what some people assume, the declaration of invalidity does not automatically or “ope legis” produce a kind of radical corporate “restitutio in integrum” or automatic return to the state of things prior to the annulled agreement, not even for internal purposes.


  • It cannot be ignored that there are two levels in the company, the contractual and the organizational, and that the successive organizational acts adopted by the company, once their legal cause is declared null and void, must be validated or regularized in accordance with the rules and principles of corporate law.


  • The precept of Article 6.3 of the Spanish Civil Code cannot be transposed to the causes of nullity of the ASL, nor do the legal contraventions all have the same entity and effects (…) in any case, the jurisprudential doctrine recommends “extreme prudence and flexible criteria” in the application of radical nullity.


The legal basis of the resolution also mentions, among other theoretical developments, that

  • Company law is inspired by “two major principles”: that of legal certainty, but also that of traffic safety, with acts performed under an appearance that “third parties can trust” being preserved.


  • Corporate resolutions can be revoked and replaced (Article 204.2 LSC), but they can also be rectified (Article 207.2 LSC); although the latter will proceed in the event of ineffectiveness for formal reasons, and in the event of ineffectiveness for material reasons a new resolution of a revoking nature – leaving the previous one without effect – or of a replacing nature – replacing the previous one with another one of materially incompatible content, must be adopted. In any case, the retroactive effectiveness of this type of agreement, whether it is a revocation, a replacement or a remedy, must respect the rights acquired by third parties.

And, finally, after an extensive generic argument on the matters summarised, which is of unquestionable theoretical interest, but of little practical applicability to the case under examination, the decision rejects the appeal lodged by Laminados de Aller S.A. and confirms the qualification appealed against, reasoning that it is not possible to register the substitution of the agreement affected of nullity without adopting another agreement that modifies the terms of the accordion operation of 30 April 2015, in which Inversiones Sadim S.A. could not exercise its preferential subscription right since no class A privileged shares were issued on which to do so. 

In fact, it is of little use – and would be illusory – the subscription by Sadim Inversiones S.A. of privileged class A shares in the accordion operation of 15 September 2014, if these shares were subsequently redeemed in the accordion operation of 30 April 2015, in which no new class A shares were issued that Sadim Inversiones S.A. could subscribe. Therefore, it is necessary to have a substitute agreement for the second accordion operation that combines its content with the agreement of the first one, complying with the DGRN’s pronouncement mentioned in the contested rating note: “If, as a result of the final judgment declaring the nullity of agreements, a situation arises which does not meet the requirements of coherence and clarity demanded by the legislation on the Commercial Registry, it will be the responsibility of those who are obliged to urge the adoption of the necessary agreements to implement the judgment of nullity and to regularise the legal situation of the company with regard to the acts and legal relationships affected.

What happens, then, with the rights of the other bona fide partners that Laminados de Aller S.A. repeatedly invokes? Although the resolution is silent on this matter, it could be deduced that – according to the criterion of the management center – since the subscription of new shares in the second accordion operation by those would not be affected, no rights acquired in good faith would be harmed. As for the duty of the rest of the members to be and go through the new shareholder rights that must be recognised to Sadim Inversiones S.A. – which imply at least (i) a proportional reduction in the capital share of each of the other members and (ii) a lower participation of these in the distribution of dividends – it could also be deduced that it is not considered to be a “new obligation” for these members (art. 291 LSC), which may be debatable.

Finally, with regard to the distinction between the correction of agreements for formal reasons and the replacement of those by others in the presence of material defects, the resolution does not enter into the debate – and this despite the broad doctrinal deployment on the subject – since, having resolved that it is necessary to modify the second accordion operation, the registry qualification is confirmed, without the need to enter into a decision on whether the modification of the first operation should be based on a 2014 balance sheet (correction) or on one from 2019 (replacement), a decision that would undoubtedly have been of considerable interest.  

In summary, this resolution exemplifies the technical difficulty that weighs on the regularization of the corporate history when an old corporate agreement has been declared null and void, because although its effects “ex tunc” are applied with the greatest prudence and flexibility, in most cases there will be conflicting interests of impossible total conciliation, so that the resolution – like the present one – that settles the discussion will produce a more or less serious damage to a party in an unjustified manner.


Article published in ALMACEN DE DERECHO on 18th April 2020