Nullity of social agreements due to infringement of the right to information

The partner’s right to information in limited liability companies is included in art. 196 LSC:

“1. The partners of the limited liability company may request in writing, prior to the general meeting or verbally during it, the reports or clarifications they deem necessary regarding the matters included in the agenda.

2. The management body will be obliged to provide them, orally or in writing, depending on the time and nature of the information requested, except in cases in which, in the opinion of the body itself, publicizing it harms the corporate interest.

3. The refusal of information will not proceed when the request is supported by partners representing at least twenty-five percent of the social capital.”

The Supreme Court has recognized the importance of this fundamental right of the partner. The STS of March 22, 2000 defined such right as: “… that which tries to provide the partner with direct knowledge of the situation and management of the company anonymous, and of course it is one of the most important rights that the shareholder can count on.”

Both the doctrine and the legislator have been strengthening more and more the right to information of the partner, decreeing the radical nullity of the agreements adopted in the General Meeting in violation thereof.

The Supreme Court has considered this right consubstantial and irrevocable, of non-derogable, inalienable, non-transferable and inseparable minimum content of the action (SAP of the Balearic Islands of April 29, 2010)

Similarly, the successive legislative modifications point to an increase in the enforceability of administrators to provide all the information required by the minority shareholder. The Provincial Court of the Balearic Islands in a judgment dated November 25, 2004 makes mention of the doctrine of the Supreme Court that alludes to this reality:

“… says the sentence of November 15, 1994 (RJ 1994, 8774) that quotes the previous one, which is fully applicable to the current article 212.2, whose text empowers Faced with the repealed legislation, the partner’s right to information, because if in the old article 110 the Board of Directors was imposed the obligation to make available to the partners, at the registered office, the documents to which the precept referred to (without prejudice to the right of partners to request the reports and precise clarifications established in article 65 of the 1951 Law and today included in article 112, a transcript thereof), the current article 212.2 grants the right to obtain from the society, immediately and free of charge, the documents that must be submitted to the approval of the Meeting and the report of the account auditors, and this in order that the partners can obtain a more complete knowledge of the progress of society and can cast their vote with a more well-founded knowledge of the cause»”

The new Capital Companies Law emphasizes the relevance of this right on repealed regulations. In the previous law, the right to information of art. 212 LSA referred to in the preceding sentence was included in Section IX of Chapter VII on approval of accounts, the new LSC articulates an individualized Section for the right to information (Section II of Chapter VII).

The new wording uses a certainly more imperative formula, and in contrast to the right to obtain free of charge that governed the literality of the old art. 212 LSA, the new art. 196 LSC provides that the administrative body shall be obliged to provide the reports or clarifications that the partners deem necessary on the matters to be discussed at the Meeting

The exercise of the right to information pursues specific knowledge of the matters to be dealt with at the General Meeting and is essential for the shareholder to be able to exercise the company rights that are his responsibility.

For this reason, the interrogation of accounting details related to the agenda, carried out by a partner before the act of the Meeting, obliges the company to provide the clarifications that are requested for that the member can debate and vote on the corresponding end of the agenda with fair and adequate knowledge of the subject (SSTS of May 21, 1968, October 15, 1992, November 2, 1993, March 29 and 13 of October and November 15, 1994 or Valencia SAP of December 21, 2000 and February 10, 1997).

Likewise, it is revealed as a true instrument of control of corporate management and an effective complement to the right to deliberate, which according to our jurisprudence has been exercised and interpreted in accordance with the good faith (SSTS of November 3, 1962 and December 26, 1969 and Madrid SAP of January 18, 2000).

The judgment of April 1, 2005 of the Provincial Court of Tarragona said on this matter:

“… on the day the Meeting was held on June 30, 2002, the Sole Administrator of the lawsuit answered almost all the questions with evasive or impertinent responses, not providing information of the extremes requested by the actor. It is true that, in his day, the actor was the owner of all the shares of the company and today he only holds 20% of the share capital, but this issue does not prevent him from not being informed, because precisely The raison d’être of the principle and right to information provided for in article 112 of the Consolidated Text of the Corporations Law is to protect minority shareholders or shareholders who do not have control of the company …“

As maintained by the Provincial Court of Alicante in its judgment of June 15, 2006, the partner’s right to be informed is the power that he or she has attributed by law to obtain a correct and due knowledge, as exact as possible, of the economic, patrimonial and financial situation of the company, as well as the necessary data to calibrate and qualify the company’s management.

In return, it supposes an inexcusable obligation for the executive body of the company, whose breach allows the challenge of agreements approved by the deliberative body, in whose management the referred right to be informed; and as a consequence of this, declare the nullity of the aforementioned acts or agreements (SSTS of March 12, 1976, May 3, 1977, June 20, 1982, March 8, July 14 and December 19, 1984, January 26, 1993, July 29, 2004, or SAP Pontevedra June 26, 2006).

Since one of the purposes of the right to information requires the provision of the necessary data so that the member can justify the criteria of his vote, the jurisprudence has determined that the answers must be offered prior to voting on corporate resolutions.

Otherwise this function of the right to information would be undermined. The aforementioned sentence of the Supreme Court of March 22, 2000 ensures that:

“However, it does not establish when or how the administrators or those obliged to inform must provide the information, but logically it must be proclaimed that this should be do at the time such information can be used by the shareholder to cast the vote, since another occasion would make such right illusory.”

In the same sense, the judgment of the Provincial Court of Pontevedra of June 29, 2006 has been pronounced.

The reference to the annual accounts is insufficient to provide the partner with the necessary information that is protected by the proclaimed law. In this sense, the judgment of the Provincial Court of Valencia of February 10, 1997 was pronounced.

The judgment of the Provincial Court of Pontevedra of June 29, 2006 declared the nullity of corporate agreements for infringement of the right to information to the extent that that said right had not been exercised in an unjustified manner or for obstructionist purposes:

“Hence, the right to information has been infringed, since, not being exercised in the case at hand in an abusive or obstructionist manner, it turns out that the interested parties did not receive nor were they able to examine the documentation they required (among which the one that served as a support to the accounting was extremely important, since the approval of the annual accounts was going to be submitted to the Board) … “< /em>