Introduction
Spanish company law allows limited liability companies and public limited companies to provide in their articles of association for the creation of shares without voting rights, whilst retaining their economic rights. The legislation permits this removal of voting rights whilst, in return, safeguarding economic rights, requiring, amongst other privileges, that a minimum dividend be provided for these shares and the consequent temporary restoration of voting rights should the distribution of such a dividend not be complied with.
The Supreme Court has recently handed down the first rulings on this matter, which finally makes it possible to define the exact scope of the circumstances in which these shares may regain their voting rights.
Here at the Commercial Law department of Belzuz Abogados, S.L.P. in Madrid, as experts in company law, we believe it is essential to have access to specialist advice that is up to date with the latest developments in case law and legal doctrine, so that these can be correctly applied to the management of limited companies and business planning.
In this article, we shall analyse the applicable legislation and recent case law on the subject, focusing on Supreme Court Judgements 440/2026 and 1014.
Applicable legislation. Articles 98 to 103 of the Companies Act (LSC). Article 99(3) of the LSC
The regulation of non-voting shares is set out in Articles 98 to 103 of Royal Legislative Decree 1/2010 of 2 July, approving the consolidated text of the Companies Act (LSC).
Article 98 permits the creation of such shares, stipulating that, in limited liability companies, their nominal value must not exceed half of the share capital, and in public limited companies, their nominal value must not exceed half of the paid-up share capital.
Article 99 of the LSC is the focus of our analysis. Paragraph 1 of the article stipulates that holders of these non-voting shares are entitled to receive a minimum annual dividend, which may be fixed or variable, and which shall be laid down in the company’s articles of association. Once this minimum dividend has been agreed, the holders of these shares shall be entitled to the same dividend as that corresponding to ordinary shares.
The first point to clarify is that the creation of these non-voting shares or equity interests is not permissible if the company’s articles of association do not expressly provide for this minimum dividend; consequently, the rules governing its determination are a sine qua non condition for the valid existence of these shares and equity interests.
For its part, Article 99(2) of the LSC imposes an obligation to distribute the minimum dividend if there are distributable profits.
Article 99(3) of the LSC is the provision that allows for the restoration of voting rights. The provision begins by stating that, if there are no distributable profits or if they are insufficient, the unpaid portion of the minimum dividend must be paid within the following five financial years. However, so long as this minimum dividend remains unpaid, non-voting shares and holdings shall have voting rights on an equal footing with ordinary shares, without this being to the detriment of their recognised economic rights.
The protection of the economic rights of non-voting shares and equity interests also extends to capital reductions, as Article 100 of the Companies Act provides that they are not affected by a reduction in share capital due to losses, except where the reduction exceeds the nominal value of the remaining shares. If, following a capital reduction, the percentage of non-voting shares or equity interests exceeds the limits set out in Article 98 of the LSC, the deadline for restoring the proportion is two years, failing which the company may be dissolved. Furthermore, where, upon a capital reduction, all ordinary shares are redeemed, the non-voting shares shall regain their voting rights until the proportion set out in Article 99 of the Companies Act is restored.
This economic privilege also extends to the winding-up of the company by virtue of the provisions of Article 101. In limited liability companies, non-voting shares are entitled to reimbursement of their value before any amount is distributed to the holders of ordinary shares; whilst in public limited companies, the privilege extends to the reimbursement of the paid-up value of the non-voting shares.
Restoration of voting rights in the event of failure to distribute the minimum dividend. Supreme Court Judgements 440/2026 and 1014/2026
Until 2026, the Supreme Court had not ruled on the interpretation of Article 99(3) of the Companies Act (LSC), when it handed down two judgements relating to the same company and involving the same litigants in both cases. These rulings establish the key interpretative parameters regarding the exact moment at which the right to vote is restored.
The first case is that decided by Supreme Court Judgment 440/2026 of 20 March. In this case, a shareholder of a limited company challenged a resolution adopted at a general meeting which recognised the right to vote of a shareholder holding non-voting shares. At the general meeting, the right to vote was recognised on the basis of Article 99.3 of the Companies Act (LSC), and this vote proved decisive in achieving the majority required by the law for the resolution to be valid; in this instance, the resolution authorised the sale of an essential asset. Whilst the judgments at first instance and on appeal dismissed the challenge, the High Court ultimately upheld it by quashing the judgment under appeal.
The ratio decidendi in this case centred on whether the provision in Article 99.3 of the Companies Act stating that the right to vote shall be restored ‘until the minimum dividend has been paid’ requires that the annual accounts have previously been drawn up and approved, resulting in the absence of distributable profits, or whether this requirement is met simply by the fact that the minimum dividend has not been paid.
In short: the Supreme Court proceeds to define the exact moment at which the right to vote is restored. The judgement distinguishes between two scenarios:
1) If the minimum dividend has been paid in previous years, the holder of non-voting shares attending a general meeting prior to the date on which, by law, the company’s accounts and the corresponding dividend distribution should be approved, shall be excluded from voting. It should be borne in mind that the deadline for holding a general meeting to approve the annual accounts is six months from the end of the financial year; consequently, as the financial year usually coincides with the calendar year, the deadline by which the accounts for a financial year must be approved is 30 June of the following year.
2) Conversely, if the minimum dividend was not paid in the previous financial year due to a lack of distributable profits, the holder of non-voting shares or units shall have the right to vote at any subsequent general meetings.
In other words: holders of non-voting shares or units regain their voting rights at the moment the accounts are approved in which it is agreed not to distribute the minimum dividend or, in the absence of such approval, at the moment when that ordinary general meeting should have been held in accordance with the requirements of the regulations, which is within six months of the end of the financial year.
Supreme Court Ruling 1014/2026 of 24 June further clarifies this doctrine by ruling on whether the right to vote may be restored precisely during the meeting at which the annual accounts for the financial year in which the shares were created are submitted for approval.
In this regard, it should be clarified that the conditions for the restoration of voting rights set out in Article 99(3) of the Companies Act (LSC) apply only from the moment such shares are created. To put it another way: the fact that a minimum dividend was not paid when these shares or equity interests—which are non-voting but entitled to a minimum dividend—did not yet exist cannot give rise to the restoration of voting rights, as the failure to pay dividends cannot have any effect at a time when such a failure to pay the minimum dividend was not foreseeable.
The matter is clear if non-voting shares are created at the time of the company’s incorporation, but doubt may remain in cases where non-voting shares are created subsequently by way of an amendment to the articles of association.
The Supreme Court’s conclusion takes the doctrine of the previous judgement to its logical conclusion. At the annual general meeting held in the same financial year in which the non-voting shares were created (it is understood that they were created in the first half of that year), the shareholder holding these shares shall not have the right to vote when deliberating and voting on the first resolutions, which consist precisely of the approval of the accounts for the previous financial year (a matter which traditionally features among the first items on the meeting’s agenda) however, once the approval of the accounts is adopted at that meeting without the distribution of the minimum dividend, the non-voting shares regain this right during the course of the meeting and the holders may vote on the subsequent items on the agenda.
The right to vote may therefore be regained during the course of a meeting, and whilst it does not apply to the first resolutions, it does apply to subsequent ones.
Conclusion
The summary of the established legal principle, as confirmed by the case law discussed, is that the right to vote attached to non-voting shares is restored at the precise moment the accounts are approved without the distribution of the minimum dividend; this right is restored even during the course of the meeting in question for resolutions adopted after the approval of the accounts. Likewise, the right to vote is restored if the deadline for holding the annual general meeting passes without the meeting having taken place.
The precision required by this doctrine reinforces the need for expert and specialised advice. At Belzuz Abogados, S.L.P., our Commercial Law department has over 65 years’ experience in the design and execution of all types of corporate transactions, as well as in assisting with the preparation of general meetings and the implementation of resolutions. You may contact us via the contact details provided on our website.
Abstract
Non-voting shares allow partners or shareholders of companies to participate in the economic rights without being involved in the management of the company or casting a vote at general meetings, although in return they are granted certain economic privileges compared to ordinary partners or shareholders. However, Spanish company law (Article 99.3 of the Companies Act) allows these partners or shareholders to temporarily regain their voting rights if their right to receive a minimum dividend is infringed. In this article, we examine the recent case law set out in Supreme Court Judgements 440/2026 and 1014/2026, which have established case law for the first time regarding the exact moment at which this right to vote is restored.