The Supreme Court’s New Doctrine on Non-Voting Shares.

Non-voting shares (participaciones sociales sin derecho de voto) are a legal instrument recognised and regulated under Articles 98 to 103 of the Spanish Companies Act (Ley de Sociedades de Capital, hereinafter the “LSC”).

Pursuant to Article 98 LSC, private limited companies (sociedades de responsabilidad limitada) may create non-voting shares with an aggregate nominal value not exceeding one half of the company’s share capital.

These shares confer a number of privileges upon their holders, including the right to a minimum annual dividend, payable regardless of any ordinary dividend that may be declared (Article 99 LSC), as well as preferential rights in the event of a reduction of capital due to losses (Article 100 LSC) and with respect to liquidation proceeds (Article 101 LSC).

In two recent judgments dated 20 March and 24 June 2026, the Spanish Supreme Court, when considering a specific set of circumstances, has established important case law regarding the right to the minimum annual dividend and the point at which the statutory consequences of non-payment are deemed to arise. These consequences are that: (i) the unpaid minimum dividend must be paid within the following five financial years; and (ii) until such minimum dividend has been paid, the holder acquires voting rights on the same basis as holders of ordinary shares.

In the case under review, the company was a private limited company whose shareholders resolved at a meeting held in March 2018 to create non-voting shares. The holder of those non-voting shares was subsequently allowed to exercise voting rights at a shareholders’ meeting held in March 2019, on the basis that the minimum dividend had not been received. The resolutions passed at that meeting were challenged precisely because of the significance of that shareholder’s vote in favour of the resolutions.

The appellants argued that the holder’s failure to receive the minimum dividend was solely due to the fact that the annual accounts for the 2018 financial year had not yet been prepared, as the management body was still within the statutory period for doing so and the general meeting was likewise still within the period allowed for their approval. In other words, they contended that the minimum dividend could not be regarded as unpaid since the point at which it would become due and payable had not yet been reached.

In addressing this issue, the Supreme Court recognised that two different scenarios may arise. The first is where, at the preceding annual general meeting approving the accounts, the holder received the minimum dividend; in that case, the holder may not exercise voting rights at subsequent meetings. The second is where no minimum dividend was distributed at the meeting approving the annual accounts; in that case, the holder may exercise voting rights at subsequent meetings on the same terms as holders of ordinary shares.

However, the circumstances of the case were unusual because, if the holder of the non-voting shares had not received the minimum dividend, this was solely — at least in principle — due to the fact that the annual accounts had not yet been approved.

Accordingly, the Supreme Court held that the mere non-payment of the minimum dividend, in itself and in all circumstances, is not sufficient. In the Court’s own words:

“It is necessary that the holder has not received the minimum benefit because there were no distributable profits, and for that to be established it is necessary that, once the first financial year affected by this right to the minimum dividend has ended, the annual accounts approved by the general meeting show that there were no distributable profits.”

Therefore, where the annual accounts have not yet been approved — provided that the company remains within the statutory period for doing so — it cannot be concluded that a legally enforceable minimum dividend has been improperly withheld (since it has not yet been possible to determine whether distributable profits exist). Consequently, the exception set out in Article 99.3 LSC, which allows the holder to exercise voting rights in such circumstances, does not come into effect.

Finally, on the basis of the foregoing reasoning, the Court concluded that, in the case at hand, the holder of the non-voting shares was not entitled to vote at the shareholders’ meeting held in March 2019.

The Court then applied the so-called resistance test set out in Article 204.3 LSC, examining whether the invalid vote had been decisive in securing the statutory majority required for the resolutions challenged by the appellants. In this case, once the invalid votes were disregarded, the requisite majority was no longer achieved. Accordingly, the challenge was upheld and the resolutions were declared invalid.

Through these judgments, the Supreme Court has provided important clarification regarding the practical operation of the privileges attached to non-voting shares and their potential impact on the adoption of corporate resolutions and, where appropriate, their subsequent challenge before the courts.