Due to being a partner, certain rights and obligations are held, which are listed in article 93 of the Capital Companies Law (LSC).
However, one of the rights that raises the most doubts among our clients is the right to member information.
As a member, do I have the right to access all company information?
The proper answer to the above question should be yes, but with nuances. It should be noted that the partner’s right to information is a minimum, non-derogable and inalienable right that is recognised by the partner by the mere fact of owning shares or shares, thus configuring itself as an individual right of each and every one of the members of the participatory or shareholding structure of a company.
However, as we have already stated, the previous statement has certain nuances since this right is not unlimited, since it arises when the member is summoned to attend a General Meeting and its exercise is limited to the content of the Agenda.
There are some differences between the right to information and its exercise for the partner of a Limited Company and a shareholder of a Public Limited Company:
| LIMITED COMPANY (Article 196 LSC) | PUBLIC LIMITED COMPANY (Article 197 LSC) |
|---|---|
| Once the General Meeting has been called, you will have the right to request in writing and, before the meeting is held, all the clarifications and reports that you deem appropriate regarding the points that make up the Agenda. | Until the seventh day before the General Meeting, the shareholder may request from the Administrative Body the information or clarifications it deems necessary regarding the Agenda. Consequently, the Administrative Body must provide the requested information in writing and before holding the meeting. |
| The Administrative Body may refuse to provide the information whenever it is considered to go against the corporate interest. Notwithstanding the foregoing, the request may not be denied when this request for information is supported by partners representing at least 25% of the share capital. | The Administrative Body may deny the shareholder the requested information with just cause to protect the corporate interest. Notwithstanding the foregoing, when this request for information is supported by partners representing at least 25% of the share capital, it cannot be denied. The Statutes may set a percentage lower than that mentioned, provided that it is greater than 5% and less than 25%. |
| Once the General Meeting has been called, the member will have the right to immediately obtain the documents that must be approved at said Meeting (for example, economic information for the approval of the Annual Accounts). | During the Meeting, shareholders may verbally request the information or clarifications they deem necessary on the matters on the Agenda. If the Administrative Body is unable to provide the information at that time, they must satisfy the shareholder’s request in writing within seven days of the holding of the Meeting. |
Ultimately, the Administrative Body may deny the member’s request for information in the following circumstances:
- When the Administrative Body considers that the request for information is not related to the matters on the Agenda, or that it is unnecessary for the protection of the rights of the partner/shareholder.
- When it is understood that the partners/shareholders are acting in bad faith or the request for information is detrimental to the Company unless the aforementioned percentages are met.
What happens if a decision has been approved at the General Meeting of which the member has not been sufficiently informed?
In the case of Public Limited Companies, article 197.5 LSC provides that when the shareholder sees his right to information violated during the exercise of the Meeting, he will be empowered to demand compliance with the information obligation by the Administrative Body and may claim the damages caused, but it will not be cause for the challenge by the General Meeting in its entirety.
No specific regulation is foreseen for these cases in relation to Limited Companies. However, article 204.3.b) LSC establishes that corporate resolutions shall not be challenged when they are based on incorrect or insufficient information that is not essential for the execution of the shareholders’ right to vote; therefore, in a contrarian sensu interpretation of the provision, it may be challenged when it is essential to exercise the right to vote.
Finally, if the partner or shareholder abuses their right to information, article 197 LSC establishes that the causer will be responsible for the damages caused.
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