Exercise right of separation

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Exercise right of separation of partners

The partners may choose to exercise the right of separation in certain cases established by law. The most innovative is the exercise of the right of separation due to lack of distribution of dividends, complying with certain requirements established by the Capital Companies Law, article 348 Bis. 

In order to exercise this right, ABOGADOS VELAZQUEZ attends the shareholders’ meetings, carries out the valuation of the shares and communicates the exercise of the right to the registry. Learn how it is possible to obtain the value of your company with extensive experience and numerous solved cases. 

The legal causes of separation stipulated in the Capital Companies Law of articles 346 to 349, are the following related:

The partners who have not voted in favor of the corresponding resolution, including non-voting partners, will have the right to separate from the capital company in the following cases:

  1. Substitution or substantial modification of the corporate purpose.
  2. Extension of the company.
  3. Reactivation of the company.
  4. Creation, modification or early termination of the obligation to perform ancillary services, unless otherwise provided in the statutes.

In limited liability companies, in addition, the partners who have not voted in favor of the agreement to modify the system for the transfer of shareholdings will have the right to separate from the company.

In the cases of transformation of the company and transfer of domicile abroad, the partners will have the right of separation in the terms established in Law 3/2009, of April 3, on structural modifications of commercial companies.

Statutory causes of separation

Article 347 of the Capital Companies Law provides that the bylaws may establish other causes of separation other than those provided for in this law. In this case, they will determine the way in which the existence of the cause must be proven, the way to exercise the right of separation and the term of its exercise.

For the incorporation to the statutes, the modification or the suppression of these causes of separation, the consent of all the partners will be necessary.

Exercise of the right of separation

The agreements that give rise to the right of separation in accordance with article 346 of the Capital Companies Law, will be published in the Official Gazette of the Mercantile Registry. In limited liability companies and public limited companies when all the shares are registered, the administrators may substitute the publication for a written communication to each of the partners who have not voted in favor of the agreement.

The legitimacy for the exercise of the right of separation is granted to the partner who has voted against the agreement and made an express protest at the meeting of partners if he attended it.

To avoid the loss of the right due to the complexity of the mechanism stipulated for the exercise of the right of separation, we encourage you to contact our office, which will advise you without obligation to ensure that all the steps are carried out correctly.

The right of separation must be exercised in writing within a period of one month from the publication of the agreement or from the receipt of the communication.

Special Right of separation in case of lack of distribution of dividends, article 348 Bis TRLSC.

Unless otherwise provided in the bylaws, after the fifth year from the registration in the Company’s Mercantile Registry, the partner who has recorded in the minutes his protest for the insufficiency of the recognized dividends will have the right of separation in the event that the general meeting will not agree to the distribution as a dividend of at least 25% of the profits obtained during the previous year that are legally distributable provided that benefits have been obtained during the three previous years. However, even when the above circumstance occurs, the right of separation will not arise if the total of the dividends distributed during the last five years is equal to at least 25% of the legally distributable profits recorded in said period.

The provisions of the preceding paragraph shall be understood without prejudice to the exercise of actions to challenge corporate resolutions and liability that may correspond.

For the deletion or modification of the cause of separation referred to in the previous section, the consent of all the partners will be necessary, unless the right to separate from the company is recognized for the partner who has not voted in favor of such resolution.

The term for the exercise of the right of separation will be one month from the date on which the ordinary general meeting of partners was held.

When the company is obliged to formulate consolidated accounts, the same right of separation must be recognized to the partner from the parent company, even if the requirement established in the first paragraph of this article does not apply, if the general meeting of the aforementioned company does not agree on the distribution. as a dividend of at least twenty-five percent of the consolidated positive results attributed to the parent company from the previous year, provided that they are legally distributable and, furthermore, consolidated positive results attributed to the parent company had been obtained during the three previous years.

The provisions above will not apply in the following cases:

a) In the case of listed companies or companies whose shares are admitted to trading in a multilateral trading system.

b) When the company is in bankruptcy.

c) When, under the bankruptcy legislation, the company has informed the competent court for the declaration of its bankruptcy the initiation of negotiations to reach a refinancing agreement or to obtain adherence to an advance agreement proposal, or when has communicated to said court the opening of negotiations to reach an out-of-court settlement of payments.

d) When the company has reached a refinancing agreement that satisfies the conditions of non-termination established in the bankruptcy legislation.
e) In the case of Sports Public Limited Companies.

Once the right has been exercised and the value has been communicated to the company, in case of non-acceptance, the Commercial Registrar must be requested to appoint an expert who will proceed to value the participations / shares. Our team is an expert in corporate valuation, so we can supervise the expert’s report if the value does not correspond to business reality. We also manage the negotiations until the end of the procedure or, where appropriate, we challenge the expert’s report. ABOGADOS VELAZQUEZ provides you with a comprehensive service with demonstrable experience in this complex matter, from attending the shareholders’ meeting to the effective receipt of the amount to your satisfaction. Consult us without obligation and you will check our experience in this complex matter. 

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