Practical issues related to the right of separation

On January 21, FIDE held a session dedicated to analyzing the practical issues of the right of separation in the corporate sphere, in which Jorge Bonilla, a lawyer at ECIJA, participated along with prominent legal professionals from the judicial and academic fields.

The session began by considering the right of separation as a mechanism for terminating a shareholder's status vis-à-vis the company, which requires the company to acquire the shares or participations of the shareholder exercising this right at their fair value. This prerogative is designed as an instrument to protect minorities in contexts of internal conflict, whose potential to manage corporate tensions contrasts with its limited practical use in the Spanish legal system.

During the meeting, the cases outlined in Article 346 of the Capital Companies Act (LSC) were analyzed, including substantial changes to the corporate purpose, the extension of the initially determined duration, and changes in the transmission regime in limited liability companies. In practice, the "substantial" modification of the corporate purpose remains one of the most controversial cases and opens the debate on what should be understood as a substantial alteration and whether a formal modification is necessary or if a material transformation of the activity is sufficient.

Particular attention was paid to the right of separation for lack of dividend distribution as provided for in Article 348 bis of the LSC, as well as the exit right introduced by Royal Decree Law 5/2023 in certain structural modifications, whose configuration, although technically not a right of separation, produces similar practical effects by allowing the shareholder to leave by transferring their participation.

One of the central topics of debate was the wide margin of statutory autonomy to configure additional separation causes, establish valuation methodologies, regulate the distribution of costs of the independent expert, or even admit separation ad nutum, always within the limits arising from corporate public order and respect for the essential content of the right. In this context, the relevance of statutory design as a tool for good corporate governance and conflict prevention was emphasized.

Similarly, the inadequacy of positive regulation in key areas was highlighted, especially concerning the moment of loss of shareholder status and the legal regime of the shareholder in an intermediate situation after exercising the right. The jurisprudence of the Supreme Court has linked this loss to the effective payment of the value of the shareholding, a solution that generates practical tensions and highlights the need for legislative reform to provide greater clarity and legal certainty.

In summary, the session concluded that the right of separation, despite its formalist and fragmented regulation, can become an effective tool for exit and corporate restructuring when articulated through careful statutory design and application in accordance with the principles of good faith and balance among shareholders.