Validation of corporate agreements declared void
Contrary to what the Mercantile Registrars have been interpreting, the General Directorate of Registry and Notaries (DGRN) considers that they can be validated, that is, Corporate agreements declared null and void by final judgment may be registrable in those cases in which the declaration of nullity of the agreements in question was not motivated by being contrary to the Law or Bylaws (causes of nullity absolute according to the Capital Companies Act), that is, irremediable.
A case in which the DGRN is resolving along the aforementioned lines is when the annulment of the agreements is dragged down by the declaration of nullity of the General Meeting of Members – for example, for not having fulfilled the requirements, legal or statutory, for its valid constitution- by means of a firm resolution.
Recently the DGRN in its resolution of July 4, 2016 has declared that the nullity of the constitution of the Board although it drags the nullity of the agreements taken within it, said nullity cannot be extended to the very essence or nature of the same, if there is no doubt about these that they would have been considered valid if they had been agreed in a valid and regular Meeting.< /p>
For practical purposes it would be illogical to think about the possibility of validation of a null and void agreement (contrary to the Law or Statutes), since its ratification by means of a new agreement would mean re-incurring the same defect that declared it null and void.
However, annulling what was agreed is one thing, and the way in which it was agreed is another. Wouldn’t that be contrary to the principle of stability or conservation of the effects of agreements? the impossibility of validating an agreement declared null due to a merely formal breach of any of the requirements set forth for its adoption?
In the circumstance analyzed, we refer to non-compliances that can be corrected by means of a convalidation and majority agreement of a new Board validly constituted or held.
The cause for nullity of the agreement in question should not be left out of the debate. And depending on the case, the validation of certain agreements must be accepted when their nullity is not motivated by incurring in a cause of absolute nullity.
This same line coincides with the important novelties on the subject introduced by the LSC that offers greater possibilities of healing – see articles 204.2 or 207.2 of the same– protecting traffic safety and the protection of third parties through this new legal framework because a company has already manifested itself in traffic under the guise of formal security.
In accordance with the aforementioned principle of stability or conservation of the effects of corporate management agreements, both doctrine and jurisprudence, allow and declare necessary, the validation of certain agreements in order to avoid the harmful consequences that their cancellation produces for the rights acquired by partners and third parties.
The fact cannot be ignored that in every society there are two levels, the contractual and the organizational; Therefore, the successive organizational acts adopted by the company, once the legal cause of the same has been declared void, must be validated or regularized in accordance with the principles of corporate law, fully respecting the constitutionally recognized principle of legal certainty.
In short, a restrictive and thoughtful interpretation of the principle nullum est nullum effectum producit is necessary, which would prevent the validation of agreements declared null and void for extrinsic causes that, therefore, they do not preclude their correction or valid adoption.
26/10/2016
