Act 5/2021 of 12 April amending the revised text of the Capital Companies Act, approved by Royal Legislative Decree 1/2010 of 2 July, and other financial regulations, with regard to the promotion of long-term shareholder involvement in listed companies.

The BOE of 13 April 2021 published Act 2/2021, which contains amendments to a large number of legal instruments regulating companies, relevant amendments to the legal regime of listed companies, of which the following are outlined in this brief entry:

  • Act 35/2003 on Collective Investment Undertakings and Law 22/2021 on Venture Capital Companies: the respective management companies must develop a “policy of involvement” in those companies in which they invest, with reference to strategy, financial and non-financial performance, risks and capital structure, social and environmental impact and corporate governance.
  • Securities Market Law: it regulates the prospectus for securities offerings, which must comply with the requirements of Regulation (EU) No. 2017/1129. On the other hand, it regulates the figure of proxy advisors, also known as proxy advisors, who will be obliged to publish an annual report on the “accuracy and reliability” of their activities, which must mention, among other aspects, “the important characteristics of the methods and models applied”. Proxy Advisors are also obliged to disclose “without delay” any conflicts of interest that may influence their voting recommendations.
  • Commercial Code: the section of the management report relating to personnel should include information on the “mechanisms and procedures that the company has in place to promote the involvement of workers in the management of the company, in terms of information, consultation and participation.
  • Act 1/2010 on Capital Companies:


  • Firstly, it encourages the long-term involvement of shareholders in listed companies, establishing an exception to the system of proportionality between the nominal value of the share and the rights conferred by it, such that the bylaws of these companies may provide for the voting rights attributed to shares held by the same shareholder for two (2) consecutive years to be multiplied by two (x2). Logically, following the ratio legis of the rule, this double voting right will be extinguished as a consequence of the transfer or transfer of the shares inter vivos to unrelated persons.
  • Secondly, the articles of association authorise the directors to call meetings exclusively by electronic means, which will be subject to the general rules for face-to-face meetings, adapted to the special features deriving from their nature. The amendment of the articles of association granting such authorisation to the directors must be approved by two thirds of the share capital.
  • Thirdly, within the duty of diligence required of company directors, the duty to “subordinate, in any case, their private interests to the interests of the company” is added. From our point of view, it is clear that the fiduciary relationship that exists between director and company implies the aforementioned subordination of interests, but the use of the term “company”, instead of “company”, seems to broaden the subjective perimeter of this duty, an issue that will undoubtedly be the subject of jurisprudential examination.
  • Fourthly, the list of persons related to the directors has been modified (art. 231 LSC. From now on, any company in which the director directly or indirectly owns ten percent (10%) of its share capital will be considered a person related to the director, instead of the fifty percent (50%) that the rule established until now; or, even without owning shares, the director holds a position on the administrative body or in senior management. On the other hand, shareholders represented by a proprietary director will be considered to be related persons.
  • Fifthly, and with the same threshold of share capital above which personal relationships are presumed iuris et de iure, related-party transactions shall be understood to be those carried out by the company or its subsidiaries with directors, with shareholders holding ten per cent (10%) or more of the voting rights or represented on the company’s board of directors, or with any other persons who should be considered related parties in accordance with International Accounting Standards. Companies must also announce the related-party transactions they carry out on the company’s website and notify the CNMV for public dissemination.
  • Sixthly, it regulates the system for approval of the company’s related-party transactions, establishing ten per cent (10%) of the total asset items as the amount of the amount of such transaction, above which such transaction must be approved by the General Meeting, with the duty of abstention of the shareholder concerned except in cases where the proposed resolution has been approved by the board of directors without the vote against of the majority of the independent directors, applying – where applicable – the rule of reversal of the burden of proof provided for in article 190.3 LSC, whereby in the event of a challenge to the resolution, it will be the company and the shareholders in dispute who will have to prove that the resolution does not contravene the company’s interests. Related-party transactions whose amount does not exceed 10 per cent (10%) of the company’s assets may be approved by the board of directors, with the conflicted director’s duty to abstain, unless the conflicted director is related to the parent company, and the rule of proof provided for in article 190.3 LSC shall also apply.
  • Seventh, listed companies shall have the right to know the identity of the shareholders and the ultimate beneficiaries of their share capital, in order to communicate directly with them with a view to facilitating the exercise of their rights and their involvement in the company.

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