Your partner breaks the shareholders' agreement: what to claim

The case, in five lines

What is brought

A personal action for performance of the shareholders' agreement or, at the injured party's choice, for its termination, with damages in either case (articles 1091, 1101 and 1124 of the Civil Code), and a claim for the agreed penalty (articles 1152 to 1154). Where a meeting resolution, besides contradicting the agreement, breaches the law or the articles or harms the corporate interest, an action against the company to set it aside under article 204 LSC.

Before which court

As a rule, the civil section of the Tribunal de Instancia (the first-instance court), with appeal before the Audiencia Provincial (the provincial appeal court): the claim against the partner for performance, the penalty or damages rests on the Civil Code, not on company law. It may go to the commercial section if a company-law action is joined, such as the challenge to the meeting's resolution, and some provincial appeal courts send there agreements that bear on the running of the company. If the agreement includes an arbitration clause, the dispute between signatories goes to arbitration.

Deadline

Five years' prescription for the contractual action, from when performance could be demanded; for continuing obligations to do or not to do, time starts each time they are breached (article 1964.2 of the Civil Code). The challenge to the resolution lapses one year after it was passed at the meeting or after its registration became enforceable (article 205 LSC), and that period is not interrupted by a demand letter: only the formal request to negotiate suspends it.

Who can bring it

Claimant: the signatory shareholder harmed by the breach, or anyone who later adhered to the agreement in writing. Defendant: the signatory shareholder or shareholders in breach. The company only if it signed the agreement as a party, and a buyer of the shares who did not sign it is not bound by it.

Financial risk

If the claim is dismissed you may be ordered to pay costs, which grow with the amount at stake, and in these cases that amount is the agreed penalty or the value of the shares. If you choose to terminate the agreement, you also lose the rights it gave you. And a judgment against your partner does not by itself undo a removal or a sale that is already valid as against the company.

The agreement binds your partner even if it is not in the articles

Your partner's answer is the most common one, and it is wrong. Article 1255 of the Civil Code allows contracting parties to agree whatever terms, clauses and conditions they see fit, provided they are not contrary to the law, morality or public policy, and article 1091 gives obligations arising from contracts the force of law between the parties. A signed shareholders' agreement is a contract and binds whoever signed it like any other.

What is true is something else, and it decides who the case is brought against. Article 29 LSC provides that agreements kept private between the shareholders cannot be relied on against the company. Case law describes it as an associative contract distinct from the company contract: it takes effect in the obligations between those who signed it and does not become part of the company's internal rules. The company, its bodies and third parties may act as if it did not exist.

From this follows the first rule: you claim against the partner, not against the company. The company is bound only if it signed the agreement as a party, which is common in investment rounds and changes the analysis. Anyone who became a shareholder later is bound only if they adhered in writing. That is why the first step is to check who signed, on what date and in what capacity: the action, the defendant and the good-faith arguments discussed below all depend on that list.

Challenging the meeting's resolution: when it helps and when it backfires

The first instinct is to seek annulment of the June resolutions. The Tribunal Supremo (the Supreme Court) has held that a company resolution cannot be set aside merely because it contradicts a shareholders' agreement, even one signed by every shareholder. Article 204 LSC admits as grounds only breach of the law, of the articles or of the meeting regulations, and harm to the corporate interest, which includes a resolution imposed abusively by the majority.

That leaves your two resolutions with different fates. Article 223 LSC allows the meeting to remove directors at any time, even if the item is not on the agenda, so your removal is valid as against the company unless your articles demand a reinforced majority: in a limited company they may raise it up to two thirds of the votes, and 65 % falls short. Sending the whole profit to reserves, on the other hand, can be attacked if it meets the abuse test in article 204.1 (no reasonable need, in the majority's own interest and with unjustified detriment to you), which we develop in the guide on resolutions passed without the minority shareholder. That action lapses after one year.

The doctrine has a second face that almost nobody mentions. The Tribunal Supremo considers it contrary to good faith, and an abuse of rights within the meaning of article 7 of the Civil Code, for someone who signed an agreement among all the shareholders to later challenge a resolution adopted precisely to comply with it, and it repeated this in 2026. If you voted for, or took money under, a resolution that implemented the agreement, that approach works against you the day you want to attack it; and it works for you if it is your partner who tries.

Performance, termination or payment: the choice that decides the case

Article 1124 of the Civil Code lets you choose between demanding performance or termination, with compensation for loss and payment of interest in either case, and allows you to seek termination even after opting for performance where performance proves impossible. Article 1101 makes anyone who in any way contravenes the terms of their obligations liable to compensate. All three routes exist; the work lies in choosing the one that suits you.

Specific performance works well for obligations to transfer. If the agreement fixes the parties and the price or its formula, article 708 of the Ley de Enjuiciamiento Civil (the Civil Procedure Act) allows the court to treat as given the declaration of intent the defendant refuses to make, which serves to enforce a call option or a tag-along right. With votes it works less well: you can ask that he be ordered to vote a certain way at future meetings, but the vote cast in June has already taken effect and no judgment erases it.

Termination is the option most often requested and the least often advisable. Terminating the agreement releases you, but it also extinguishes your tag-along right, the dividend commitment and any protection you still had against the sale. And it does not give you back the 180,000 euros: that contribution went to the company as capital or share premium, not to your partner, and the agreement cannot unwind it. In cases like yours the usual course is to keep the agreement alive and collect the penalty and damages.

The penalty clause is the weapon, if it is read properly

Proving the loss caused by an adverse vote or a thwarted sale is hard and expensive. That is why agreements include a penalty, and article 1152 of the Civil Code gives it an effect worth knowing: unless otherwise agreed, the penalty replaces compensation for loss and payment of interest. You collect the agreed figure without having to prove how much you lost, but in principle you collect nothing more.

Article 1153 adds two limits. The debtor cannot escape performance by paying the penalty unless that right was reserved to him, and the creditor cannot demand both performance and the penalty unless that power was clearly granted. A claim asking for both without support in the wording of the agreement will lose one of them. The exact wording of the clause decides whether the penalty replaces damages or is added to them.

Your partner will ask the court to reduce the penalty. Article 1154 allows it to be modified equitably only where the main obligation was performed in part or irregularly, and the Tribunal Supremo consistently refuses that reduction where the breach is precisely the one the clause contemplated. It is also worth checking whether the penalty is a single sum or accrues for each breach, because with three obligations broken the difference can triple the claim.

Two clocks: five years per breach and one for the resolution

The action against your partner is personal and has no special period, so article 1964.2 of the Civil Code gives you five years from when performance could be demanded. The same provision adds the rule that matters most in shareholders' agreements: for continuing obligations to do or not to do, time starts each time they are breached. Not competing, working exclusively for the company or voting a certain way at each meeting are obligations of that kind.

It is a prescription period, which means it can be interrupted. An out-of-court demand by the creditor restarts it under article 1973 of the Civil Code, which is why a formal, well-drafted demand identifying each breach is worth far more than a conversation. If your agreement is governed by Catalan civil law, the general period for claims is ten years, and that should be confirmed before writing anything off.

Challenging the resolution runs on a different and shorter clock. Article 205 LSC sets a one-year time bar, counted from the date the resolution was passed at the meeting or, if it was registered, as a removal is, from the date the registration became enforceable. That period is not interrupted by a demand letter. Only the formal request to negotiate under LO 1/2025 suspends it, from the moment the attempt to deliver it is recorded, and the count resumes if within thirty calendar days the first meeting is not held or there is no written reply.

Before suing: mandatory negotiation, arbitration and interim measures

Article 5 of LO 1/2025 requires, for a civil claim to be admitted, prior recourse to an appropriate means of dispute resolution, with identity between the subject negotiated and the subject of the litigation. It applies both to the claim against your partner and to the challenge to the resolution. It is met by mediation, conciliation, a confidential binding offer or direct negotiation between the parties or their lawyers, and the request must describe every breach that will later be taken to court.

Article 5.3 excludes two tools that are urgent in your case: interim measures sought before the claim and preliminary inquiries do not require that prior step. If the sale to your competitor is about to be signed, a measure can be sought to hold it back while the case runs, showing a prima facie case and the risk that judgment will come too late. And article 256.1.4 of the Ley de Enjuiciamiento Civil allows a shareholder to ask for the company's documents and accounts to be produced, which helps quantify the loss.

That leaves the forum. Many agreements include an arbitration clause: if your partner invokes it in time, the court stops hearing the case and the dispute between signatories is decided by an award. That clause does not reach a company that did not sign it, so the challenge to the resolution stays before the commercial section unless the articles submit it to arbitration, as article 11 bis of the Ley de Arbitraje (the Arbitration Act) permits. Without such a clause, the claim against your partner goes, as a rule, to the civil section, because it rests on the Civil Code; if it is joined with the challenge to the resolution, the commercial section may take it, and some Audiencias Provinciales (provincial appeal courts) send there agreements that bear on the running of the company.

How we run the case, step by step

1. 1

   We read the agreement alongside the articles

   We check who signed it and in what capacity, whether the company was a party, what obligations it contains, how the penalty clause is worded, whether there is an arbitration clause and what majorities the articles require for the removal and for the June resolutions.

2. 2

   We fix both time limits and the amount to claim

   We date each breach for the five-year count under article 1964.2 of the Civil Code and the meeting resolution for the one-year period under article 205 LSC, and we calculate the penalty and any damages that could be added if the agreement allows it.

3. 3

   We secure the evidence of the breach

   We obtain the minutes with each shareholder's vote, the letter of intent or its trail and the company's accounts, and where the case requires it we work with an investigator and an expert to document the sale and value the shares.

4. 4

   We hold back the sale if it is imminent

   If the deal with the competitor is close to signing, we seek interim measures or preliminary inquiries, which article 5.3 of LO 1/2025 exempts from the prior negotiation.

5. 5

   We send the formal request to negotiate

   We send your partner a written proposal describing each breach and the amount claimed. It satisfies article 5 of LO 1/2025, interrupts prescription, suspends the time bar on the challenge and often opens a negotiated way out.

6. 6

   We sue and enforce the judgment

   Failing agreement, we bring the claim against your partner, or the arbitration if there is a clause, and within the year the challenge against the company where there is a ground under article 204 LSC. With the judgment we collect the penalty and enforce the obligations to transfer through article 708 of the Ley de Enjuiciamiento Civil.

The law that applies

• Art. 29 LSC. Agreements kept private between the shareholders cannot be relied on against the company: they bind those who signed them, but the company is not bound by them. BOE-A-2010-10544
• Art. 1091 CC. Obligations arising from contracts have the force of law between the contracting parties and must be performed according to their terms. BOE-A-1889-4763
• Art. 1124 CC. The power to terminate is implied in reciprocal obligations. The injured party may choose between demanding performance or termination, with compensation and interest in either case, and may seek termination even after opting for performance if performance proves impossible. BOE-A-1889-4763
• Art. 1152 CC. In obligations with a penalty clause, the penalty replaces compensation for loss and payment of interest in the event of non-performance, unless otherwise agreed, and may be enforced only when it is due under the Code. BOE-A-1889-4763
• Art. 1153 CC. The debtor cannot avoid performance by paying the penalty unless that right was expressly reserved to him, and the creditor cannot demand performance and the penalty together unless that power was clearly granted. BOE-A-1889-4763
• Art. 1964 CC. Personal actions with no special period prescribe five years after performance of the obligation may be demanded; for continuing obligations to do or not to do, time starts each time they are breached. BOE-A-1889-4763
• Art. 205 LSC. The action to challenge company resolutions lapses after one year, except for those offending public policy, which never lapse or prescribe. Time runs from adoption at the meeting or board, from receipt of the copy of the minutes if adopted in writing, or from the date the registration became enforceable. BOE-A-2010-10544
• Art. 5 LO 1/2025. Requires, for a civil claim to be admitted, prior recourse to an appropriate means of dispute resolution with the same subject matter, in the declaratory proceedings of book II of the Ley de Enjuiciamiento Civil, and exempts interim measures sought before the claim and preliminary inquiries. BOE-A-2025-76

Each article checked against the consolidated text published in the BOE (the Spanish official gazette).

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