Cross-cutting area · Nationwide coverage · Spanish and English
Commercial Law Lawyers in Spain
Corporate law, shareholders' agreements, M&A transactions and pre-insolvency restructuring. More than 20 years advising companies, investors and corporate groups on transactions that combine commercial law with public, environmental and sector-specific regulation.
Key element
Shareholders' agreements: the 6 critical clauses
The shareholders' agreement is the contract that sets the rules of the game between shareholders. These are the six clauses that account for most of the disputes and negotiations in private equity, joint venture and M&A transactions.
Drag-along
Drag-along right
Allows the majority shareholder — or whoever reaches the agreed threshold — to force the rest to sell their shares to a buyer on the same terms. Removes the blocking power of minority shareholders when the buyer requires 100% of the capital.
Protects: Majority / Buyer
Tag-along
Tag-along right
Gives the minority shareholder the right to join the sale when the majority shareholder transfers their shares to a third party, on the same economic terms. Prevents the minority shareholder from being left with a new controlling shareholder they did not choose.
Protects: Minority
Lock-up
Lock-up period
Temporary prohibition on transferring shares during a set period — typically 2 to 4 years. May be total or allow transfers to affiliated entities. Essential in joint ventures and private equity investment rounds.
Protects: Company stability
Vesting
Progressive acquisition
A shareholder's shares — typically a founder or key executive — are acquired in stages conditional on tenure or milestones. If they leave before the cliff (usually 1 year), they lose the unvested shares. Aligns long-term incentives.
Protects: Investors / Company
Anti-dilution
Anti-dilution protection
A mechanism that protects investors from earlier rounds against capital increases at lower valuations (down-rounds). The two main forms are full ratchet (full protection) and weighted average (proportional adjustment), the latter more common in Spain.
Protects: Earlier-round investors
Reserved matters
Reserved matters
A list of decisions requiring a reinforced majority or unanimous shareholder consent, beyond what the Capital Companies Act requires. Common examples: budget approval, borrowing above a threshold, amending the articles of association, selling significant assets and changing the corporate purpose.
Protects: Minority / All shareholders
* The shareholders' agreement is binding between the signatories (art. 29 Capital Companies Act) but is not enforceable against the company or third parties unless registered with the Commercial Registry. Aligning it with the articles of association is essential.
Law 16/2022 · Art. 583 Insolvency Act
Pre-insolvency restructuring: a 5-stage protocol
Law 16/2022 transformed Spanish pre-insolvency law by introducing restructuring plans with the ability to cram down dissenting creditors. Acting early — before reaching actual insolvency — is the difference between restructuring and filing for insolvency.
- 01
Detecting and analysing the financial distress situation
Law 16/2022 distinguishes between probability of insolvency (a company that may default within the next 12 months) and imminent insolvency (a company that will not be able to regularly meet its obligations within the next 3 months). The analysis should be carried out as soon as the first signs of liquidity strain appear, before reaching actual insolvency.
⏱ Preventive action — before actual insolvency
- 02
Filing the communication under art. 583 of the Insolvency Act with the Commercial Court
Filing the communication with the competent court, evidencing that negotiations with creditors have begun. Immediate effects: suspension of enforcement against assets necessary for business activity for 3 months (extendable to 6 months). It also suspends the obligation to file for voluntary insolvency during that period.
⏱ 3 months of protection (extendable to 6)
- 03
Negotiating the restructuring plan with creditors
The debtor negotiates the plan's terms with its creditors: haircuts, standstills, debt-to-equity conversion, new interim financing (DIP financing). Creditors are classified into classes according to the nature of their claims. Interim financing negotiated during this period enjoys special protection in any subsequent insolvency proceedings.
⏱ Variable depending on the complexity of the debt
- 04
Voting on the plan by creditor class
Each class of creditors votes on the plan. For ordinary approval, the required majority in each class must vote in favour. If a class rejects the plan but the requirements of art. 654 of the Insolvency Act are met — at least one class with a genuine economic interest votes in favour and dissenters receive treatment no worse than in insolvency proceedings — judicial approval with a cross-class cramdown may be sought.
⏱ Deadline set in the plan (minimum 30 days for creditors)
- 05
Judicial approval and the effects of the cross-class cramdown
The Commercial Court approves the plan if the legal requirements are met. Approval binds all affected creditors, including those who voted against it and dissenters from classes that rejected the plan. Dissenting creditors may challenge the approval in certain cases (breach of the absolute priority rule or the best-interest-of-creditors test).
⏱ Judicial decision within a variable timeframe
Legal basis: Law 16/2022 (transposing Directive (EU) 2019/1023) · Arts. 583 and 616-694 of the Insolvency Act (RDLeg 1/2020). Interim financing granted during negotiations enjoys special protection in any subsequent insolvency proceedings (art. 597 Insolvency Act).
What we do
Commercial law services
Commercial law at Dobarro y Asociados is not a generic practice: it applies in transactions where corporate law intersects with public regulation, environmental law or foreign investment.
Corporate law
Incorporating capital companies (SL and SA), amending articles of association, capital increases and reductions, changes of registered office, dissolution and liquidation. Representation before the Commercial Registry and notaries. Board secretariat services and ongoing advice to the governing body.
Shareholders' agreements and corporate governance
Drafting, negotiating and reviewing shareholders' agreements for private equity, joint venture and M&A transactions. Incorporating drag-along, tag-along, lock-up, vesting, anti-dilution and reserved matters clauses. Updating and aligning the articles of association with the shareholders' agreement.
M&A and structural modifications
Comprehensive advice on business acquisitions: legal due diligence, deal structuring, negotiating and drafting the SPA (R&Ws, indemnities, earn-out and escrow) and post-closing. Structural modifications: mergers, spin-offs, conversions and global asset transfers under Law 3/2009.
Commercial contracts
Drafting and negotiating distribution, agency, franchise, supply, intellectual and industrial property licensing, and service agreements. Reviewing risk clauses: exclusivity, non-compete and penalties. Contractual due diligence in M&A transactions.
Pre-insolvency restructuring
Advice in situations of financial distress: filing the communication under art. 583 of the Insolvency Act to suspend enforcement, negotiating refinancing agreements, restructuring plans approvable under Law 16/2022 with cross-class cramdown of dissenting creditors, and out-of-court payment agreements.
Commercial litigation
Representation before the Commercial Courts in director liability actions (arts. 236-241 Capital Companies Act), challenging corporate resolutions, shareholder disputes and breach of commercial contracts. Commercial arbitration before the Chamber of Commerce and the Corte Arbitral del Noroeste.
Related areas
Commercial law in the context of your transaction
The most complex commercial transactions always intersect with other areas where Dobarro y Asociados has direct expertise:
Foreign capital entering Spain requires legal due diligence, company incorporation, FDI screening analysis (RD 571/2023) and shareholders' agreements drafted in Spanish and English.
Joint ventures (UTEs), concessions and public-private partnership contracts are commercial transactions governed by the LCSP, generating specific shareholders' agreements for the bidding consortium.
Hidden environmental liabilities can represent between 5% and 30% of the price in an M&A transaction. Environmental due diligence is an inseparable part of comprehensive legal due diligence.
Frequently asked questions about commercial law
What is a shareholders' agreement and is it valid against third parties?
A shareholders' agreement is a private contract between shareholders that governs their internal relations beyond what the articles of association establish. In Spain, it is fully valid between the signatories (art. 29 Capital Companies Act), but it is not enforceable against the company or third parties unless registered with the Commercial Registry. Breaching it creates contractual liability between shareholders but does not render corporate acts contrary to the agreement void. That is why aligning it with the articles of association is essential to give it maximum legal effect.
When is it advisable to file the communication under article 583 of the Insolvency Act?
The communication under art. 583 of the Insolvency Act should be filed with the Commercial Court when the debtor has begun negotiations with creditors to reach a refinancing agreement, an out-of-court payment agreement, or an approvable restructuring plan. Its immediate effects: suspension of enforcement against assets necessary for the continuity of the business for 3 months, extendable to 6 months. It must be filed before the debtor is in actual insolvency and before 1 month has passed since becoming aware of the insolvency situation (art. 5 Insolvency Act). A late filing does not exempt the debtor from the obligation to file for voluntary insolvency.
What is the difference between drag-along and tag-along?
Drag-along is the majority shareholder's right to force the rest to sell their shares alongside them on the same terms to a buyer who wants 100% of the capital. It protects the majority shareholder and the buyer against being blocked by minority shareholders. Tag-along is the minority shareholder's right to join the sale when the majority shareholder transfers their shares to a third party, on the same economic terms. It prevents the minority shareholder from being left with a new controlling shareholder they did not choose. Both clauses can coexist in the same shareholders' agreement and are triggered once the agreed ownership threshold is exceeded.
What is a restructuring plan and how does the cross-class cramdown of creditors work?
The restructuring plan (arts. 616-694 of the Insolvency Act, introduced by Law 16/2022) is the main pre-insolvency tool in Spain following the transposition of Directive (EU) 2019/1023. It allows a company in distress to restructure its debt without filing for insolvency. Its most powerful feature is the cross-class cramdown: the plan can be judicially approved even if one or more classes of creditors reject it, provided at least one class with a genuine economic interest votes in favour and dissenters receive treatment no worse than in insolvency proceedings (art. 654 Insolvency Act). Approval binds all affected creditors, including those who voted against it.
What does legal due diligence cover in an M&A transaction in Spain?
Legal due diligence in M&A covers six dimensions: legal and corporate (capital, shareholders, agreements, powers of attorney, minutes), contractual (key commercial contracts), regulatory (sector authorisations, FDI screening if the buyer is non-EU under RD 571/2023), employment (workforce, collective agreements, contingencies), tax (tax debts, ongoing inspections) and environmental (liabilities, integrated environmental authorisations, contaminated land). The result is delivered as a Red Flag report (for LOI stages or fast processes) or a full memorandum. Identified risks are addressed in the SPA through R&Ws, indemnities and escrow clauses.
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