The Shareholder’s Right to Information Under Spanish Law: Scope, Limitations, and Legitimate Exercise

The right to information is a fundamental pillar in any capital company, as it allows shareholders to access relevant data concerning the company’s management and economic-financial situation. This right is essential for informed decision-making and promotes corporate transparency.

Nevertheless, its exercise is regulated by law to ensure it is used legitimately and not abusively, thereby also safeguarding the corporate interest.

Below, we analyse the scope of this right, its legal framework under the Spanish Companies Act (Ley de Sociedades de Capital, “LSC”), and the circumstances under which it may be restricted or exempted.

What Is the Shareholder’s Right to Information?

The right to information is an essential entitlement recognised by law, enabling shareholders to access certain information regarding the operation of the company in which they hold an interest. Its legal basis lies in Article 93(d) of the LSC, which includes it among the core rights of shareholders.

Although Article 93 LSC enshrines this right, its specific content, scope, and the manner and timing of its exercise are governed by other provisions of the Law, mainly those relating to the calling and holding of general meetings (Articles 196 and 197 LSC) and the right to examine documentation concerning the annual accounts (Article 272 LSC). It is therefore not an abstract right to request any information at any time.

This right is particularly significant for minority shareholders, as it provides a tool for overseeing management and ensuring that directors act diligently and loyally, in accordance with the law and the company’s articles of association.

What Is the Legal Framework for the Right to Information at the General Meeting?

The primary regulation of the right to information in the context of general meetings is found in Articles 196 and 197 of the LSC, with differences depending on the type of company:

• Article 196 LSC (Private Limited Companies – S.L.):

“Shareholders may request in writing prior to the meeting, or orally during the meeting, such reports or clarifications as they deem necessary regarding items included on the agenda.

The administrative body is required to provide the information, unless, in its judgement, disclosure of such information could be detrimental to the company’s interests (this exception does not apply if the request is supported by shareholders representing at least 25% of the share capital).”

• Article 197 LSC (Public Limited Companies – S.A.):

“Shareholders may request information or clarifications regarding items on the agenda, or submit written questions in advance: up to the seventh day prior to the scheduled date of the meeting. The directors must respond in writing by the date of the meeting.

During the meeting, shareholders may orally request information or clarifications regarding the same matters. If it is not possible to respond at that time, the directors must do so in writing within seven days following the conclusion of the meeting.

Refusal to provide information is more restricted in S.A.s: it is only permitted if the information is unnecessary for the protection of the shareholder’s rights, if there are objective reasons to believe it could be used for purposes unrelated to the company, or if its disclosure could harm the company or its affiliates (Article 197.3 LSC). Refusal is not permitted if the request is supported by shareholders holding at least 25% of the capital (or the lower percentage set by the articles, with a minimum of 5%).”

It should be noted that the LSC does not recognise a general right to inspect documents in S.A.s similar to that which may exist in S.L.s under certain conditions (Article 272.3 LSC regarding supporting documents for the annual accounts).

When Can the Right to Information Be Exercised?

The right to information is mainly exercised in the following legally established contexts:

• Before and during General Meetings: As detailed above, shareholders may request information and clarifications on specific agenda items, in accordance with Articles 196 and 197 LSC.
• Approval of Annual Accounts: Article 272 LSC grants any shareholder the right to obtain, free of charge and immediately from the time of the meeting notice, the documents submitted for approval (accounts, management report, audit report if applicable). In addition, in S.L.s, shareholders holding at least 5% of the capital may examine supporting documentation for the accounts at the company’s registered office.
• Other cases: Outside these scenarios, access to specific information or documentation (e.g. detailed accounting, specific contracts, etc.) is not automatic. If a shareholder believes they require further information, for instance in the event of well-founded suspicions of irregularities or to assess specific transactions, they must request it from the administrative body. If the board refuses (arguing, for example, detriment to the corporate interest or lack of standing), the shareholder may seek judicial relief to assess the appropriateness of the request, provided they can demonstrate a legitimate interest and the relevance of the information.
• The specific right to request an audit (Article 265.2 LSC): It is important not to confuse the right to information with the right granted to shareholders holding at least 5% of the share capital in companies not required to have their accounts audited. These shareholders may request the Commercial Registrar of the registered office to appoint an auditor to review the accounts for a specific financial year, provided no more than three months have elapsed since the financial year-end. This is a specific and independent action, distinct from the general right to information.

When Is the Exercise of the Right to Information Considered Abusive?

The exercise of the right to information is limited by the corporate interest and the principle of good faith. It is considered abusive when a shareholder uses it for purposes other than those provided by law, such as:

• Making repeated, excessive or indiscriminate requests with the aim of obstructing management;
• Seeking access to sensitive information (industrial secrets, commercial strategies) for purposes unrelated to the company, such as providing it to competitors;
• Using the right as a tool for coercion or blackmail against management or other shareholders.

In such cases, the board may refuse the requested information, providing justification based on the protection of the corporate interest (Articles 196.2 and 197.3 LSC). The burden of proof for the abusive nature of the request or the harm to the corporate interest lies with the board if the shareholder challenges the refusal. Whether abuse has occurred is a matter of judicial assessment and depends on the specific circumstances.

Considerations Regarding Related-Party Transactions and the Duty of Loyalty

At times, the right to information is exercised to monitor transactions that may involve conflicts of interest, such as a transaction between the company and one of its directors. In such cases, beyond the shareholder’s right to information, specific rules come into play, such as:

• The directors’ duty of loyalty (Articles 227 et seq. LSC), which requires them to prioritise the corporate interest over their own;
• The prohibition on participating in the deliberation and voting of resolutions in which a conflict of interest exists (Article 228.c LSC);
• The rules governing related-party transactions, which are particularly stringent in listed companies (Article 529 vicies et seq. LSC).

The right to information allows shareholders to obtain data to verify that such transactions are conducted on arm’s length terms and in compliance with directors’ fiduciary duties.

Conclusion

The right to information is an essential tool for shareholders, but its exercise is defined and limited by the Spanish Companies Act. It is crucial to understand the procedures, timing, and limits established in Articles 196, 197 and 272 LSC to exercise it legitimately and effectively, and to distinguish it from other mechanisms such as the request for an audit under Article 265.2 LSC.

In case of doubts about its scope or if the company refuses to provide information, it is advisable to seek specialised legal advice in Madrid to assess the appropriate course of action.

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