Press release

Pérez-Llorca/IE Chair: “Article 348 bis Spanish Companies Act”


The Pérez-Llorca/IE Chair on Commercial Law dedicated its last meeting of the year to reflecting on article 348 bis of the Spanish Companies Act which, having been suspended for several years, returned to the Spanish legal system on 1 January 2017.

The discussion focused on the interpretation of this article, its doctrine, related case law and the problems with its implementation, as well as potential solutions in terms of a possible legal reform of this precept.

Carlos Nieto, Judge of Commercial Court Number 1 of Madrid, opened the session and gave a general presentation of this article in which he reviewed its background and interpretative problems. He also proposed an alternative wording of the article de lege ferenda to avoid future conflicts of interpretation regarding its operation.

Nieto also stated that, while the legislator had good intentions in introducing the regulation into the Spanish legal system in order to avoid situations that could lead to an abuse of powers, the regulation’s current wording is not the most appropriate and a rewording would be advisable.

Juan Carlos Olarra, Lecturer at IE Law School, then analysed one of the most complex issues surrounding this article: what should be considered as profits obtained from fulfilling a company’s corporate purpose. Olarra’s presentation examined whether we are faced with an uncertain legal concept and how it has been interpreted by case law so far.

To carry out this analysis, Olarra touched on what is considered as profits from operations according to the previous and current General Accounting Plan. He also pointed to the legislator’s intention in this regard in view of the parliamentary debate prior to the adoption of article 348 bis.

After these presentations, the implications of this precept in the context of insolvency proceedings were debated, and in particular, the possibility of requesting the right of withdrawal from a partner/shareholder of a refinanced company which includes the inability to distribute dividends, or if the possible illiquidity of the company acts as grounds for refusing the intended right of withdrawal. The session was moderated by Javier García Marrero, Counsel of Litigation and Arbitration at Pérez-Llorca and Senior Judge on leave of absence.

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