The partner's right of separation: dividends (art. 348 bis) and other causes

The right of separation is the partner's ability to leave the company by receiving the fair value of their shares. It is exercised through a unilateral declaration addressed to the company: the Directorate General for Legal Certainty and Public Faith classifies it as a discretionary right, so that, when exercised within the deadline and with a legal cause, your shares become a credit against the company for their fair value.

Its function is to protect the minority in closed companies. In an SL (limited liability company) there is no market to sell shares at a fair price, so the law allows a partner who disagrees with certain majority agreements to leave with their money instead of being trapped.

The regime is found in the Ley de Sociedades de Capital: legal causes in articles 346 and 348 bis, statutory causes in article 347, form and deadline for exercise in article 348, and valuation and payment in articles 353 to 356. It applies to limited and public limited companies, although article 348 bis excludes listed companies and other companies that we will see below.

The current wording of article 348 bis LSC (given by Ley 11/2018) requires all these conditions to be met at the same time: the 5th financial year since the company's registration in the Mercantile Registry must have passed; you must record your protest regarding the insufficiency of dividends in the meeting minutes; the general meeting must not agree to distribute at least 25% of the legally distributable profits from the previous year; and the company must have obtained profits during the previous 3 financial years.

Be careful with a widely circulated reference: the threshold of 1/3 of the operating profits corresponds to the pre-2018 wording. Since 30 December 2018 the bar is 25% of the legally distributable profits, and it is no longer necessary to have voted in favour of the distribution: an express protest in the minutes is enough.

There is also an escape valve for the company: even if the distribution for 1 year is insufficient, the right does not arise if the total dividends distributed in the last 5 years reach at least 25% of the legally distributable profits for that period.

In groups of companies there is a specific rule: if the company is obliged to prepare consolidated accounts, the partner of the parent company can separate when its general meeting does not agree to distribute at least 25% of the consolidated positive results attributed to it from the previous year, having had consolidated positive results in the previous 3 financial years.

The deadline to exercise it is 1 month from the holding of the ordinary general meeting (art. 348 bis.3 LSC). It is a short and fatal deadline in practice: if you let it pass, you lose the opportunity for that financial year.

Yes. Since the 2018 reform, article 348 bis is a default rule: it applies unless the bylaws provide otherwise. Many companies have incorporated clauses that exclude or modulate it, so the first thing is always to read the current bylaws.

However, suppressing or modifying this cause for separation has a price: the agreement requires the consent of all partners, unless the right to separate is recognised for the partner who has not voted in favour of that suppression (art. 348 bis.2 LSC). That is, the majority cannot take away your right without giving you an exit.

The following are excluded from article 348 bis, by paragraph 5 of the article itself: listed companies and those with shares admitted to a multilateral trading facility; companies in bankruptcy; those that have notified the court of the opening of negotiations with creditors under bankruptcy legislation; and sports public limited companies. The legal text still speaks of companies that have reached a refinancing agreement protected by bankruptcy legislation: this figure was replaced by restructuring plans in the bankruptcy reform of Ley 16/2022, so in practice the exclusion operates on companies in negotiation or with a restructuring plan of that type. The 11th additional provision of the LSC also excludes credit institutions and other financial entities.

Managora reviews your bylaws and the accounts deposited before the meeting and tells you if the right is available in your specific case, so that you do not exercise a separation doomed in advance.

Article 346.1 LSC allows partners who have not voted in favour of the agreement (including non-voting partners) to separate in these cases: substitution or substantial modification of the corporate purpose; extension of the company; reactivation of the company; and creation, modification or early termination of the obligation to perform ancillary benefits, unless the bylaws provide otherwise.

In limited liability companies there is an additional cause: the modification of the transfer regime for company shares (art. 346.2 LSC). Registry doctrine has applied it even to changes that expand free transferability, when they have sufficient entity.

Transformation, merger, spin-off and the transfer of the registered office abroad are no longer governed by this article: since Real Decreto-ley 5/2023, article 346.3 LSC refers to its first book. In cross-border operations that change the applicable law (for example, the international transfer of the registered office), the partner who votes against has the right to dispose of their shares in exchange for adequate cash compensation.

Furthermore, the bylaws can create their own causes for separation (art. 347 LSC), with their own form and deadline for exercise. For the causes in article 346, the right is exercised in writing within 1 month from the publication of the agreement in the BORME or from when you receive the written communication from the company (art. 348 LSC).

What you have the right to receive is the fair value of your shares, not their nominal value. The first route is an agreement with the company: on the figure directly, or on who values them and with what procedure.

If there is no agreement, either party (the company or the affected partner) can ask the mercantile registrar of the registered office to appoint an independent expert for the valuation (art. 353 LSC). The expert issues their report within a maximum period of 2 months from the appointment (art. 354 LSC) and their remuneration is borne by the company (art. 355 LSC).

Once the report is received, the company must pay: within the following 2 months you have the right to obtain the fair value of your shares at the registered office, as the price of those acquired by the company or as a refund for those amortised. If that period passes without payment, the administrators must deposit the amount in your name in a credit institution in the municipality of the registered office (art. 356 LSC).

The corporate closure is formalised in a public deed: the administrators declare that no partner has exercised the right or, where appropriate, that the separation has been resolved through the acquisition of the shares by the company or the corresponding capital reduction (art. 349 LSC). That step goes through a notario (Spanish notary) and the Mercantile Registry, but it is a burden on the company, not yours.

Exercising the right of separation itself (the communication to the company) does not accrue an administrative tasa (official fee). However, if it is necessary to ask the Mercantile Registry to appoint the independent expert, that file accrues registry fees and, in practice, the registrar requires a prior provision of funds from whoever initiates it (which can be the partner themselves). The expert's remuneration, on the other hand, is always borne by the company (art. 355 LSC).

Before the meeting: review the bylaws (in case art. 348 bis is excluded), the annual accounts and the distributions of the last 5 years, and calculate the thresholds. If you fear that the minutes will not reflect what happens, partners with at least 5% of the capital in an SL (1% in an SA) can demand the presence of a notario by requesting it 5 days in advance (art. 203 LSC).

At the meeting: attend personally or duly represented and expressly record your protest regarding the insufficiency of the dividend in the minutes. Without that protest there is no art. 348 bis right, no matter how scarce the distribution is.

After the meeting: exercise the right in writing and reliably (burofax with text certification and acknowledgment of receipt addressed to the administrative body) within 1 month. In the same communication it is advisable to propose a value or announce that, in the absence of an agreement, an independent expert will be requested from the Mercantile Registry.

Separation does not close other doors for you: article 348 bis itself safeguards the actions to challenge corporate agreements and liability actions that may correspond. They are compatible negotiation levers.

Managora prepares and submits it for you: we validate the deadline and requirements with your bylaws and accounts, draft the separation communication, notify it reliably and prepare the value proposal or the request for an independent expert to the Mercantile Registry. You can see the updated amount in the file for the procedure "Partner's right of separation (LSC arts. 346, 348, 348 bis)".