Multiple Voting Shares/Units in Spain
Abstract
This article explores the legal framework and practical experience of multiple-voting rights shares/units in Spain. Multiple-voting shares/units alter the balance between the cash-flow rights and voting rights of investors, granting control of the company to a minority, with significant implications for its governance and valuation. It distinguishes between the treatment of public limited liability companies (S.A.) and private limited liability companies (S.L.) under the Ley de Sociedades de Capital (LSC), outlining its respective approaches to introducing shares or units with differentiated voting rights. After discussing the growing acceptance of non-voting shares/units, loyalty shares, and multiple-voting structures, particularly in private companies and startups, while highlighting the limited adoption among public companies due to regulatory and cultural resistance, it draws on legislative developments and case studies, such as the use of dual-class shares by Abengoa, S.A. and Puig Brands, S.A., critically examining the potential benefits and risks of multiple-voting shares. The analysis concludes with insights into the evolving European landscape, including the impact of Directive 2024/2810/EU on liberalizing multiple voting schemes for SMEs, in a legal environment and culture that emphasizes shareholder equality and the different risks that can arise from the separation of voting rights and cash-flow rights in open and closed companies.
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