ADMINISTRATIVE LAW DIVISION
On 24 March, the Council of Ministers approved the draft bill transposing various EU rules on securities markets. Among other measures included in the Listing Act package, the bill introduces multiple-vote shares into the Spanish Companies Act. The so-called golden share will therefore cease to be a concept alien to Spanish public limited companies, with significant practical implications for founders, controlling shareholders and investors.
It is worth first clearing up a potential misunderstanding, since the term “golden share” has traditionally been used in a different sense from the one at issue here. In its classic meaning, it refers to the enhanced rights retained by governments following the privatisation of state-owned companies, allowing them to veto certain corporate decisions. In Spain, this regime was introduced by Law 5/1995 of 23 March, which made major decisions such as the dissolution, demerger, merger, change of corporate purpose or transfer of assets in companies such as Repsol, Telefónica, Argentaria, Tabacalera and Endesa subject to prior administrative authorisation.
The judgment of the Court of Justice of the European Union of 13 May 2003 (Case C-463/00) declared this regime incompatible with the free movement of capital, essentially because of its lack of precision and the broad discretion it afforded the Administration, without investors being able to know in advance the criteria governing the granting of authorisation. Law 13/2006 of 26 May ultimately repealed the regime formally. Since then, public control over strategic sectors has operated through other mechanisms, notably the regime governing authorisation of foreign direct investment. The CNMV itself notes that a state golden share would only be possible on an exceptional basis, for reasons of general interest and in accordance with criteria known to companies in advance.
In the strictly private sphere, by contrast, golden shares have never entirely disappeared from Spain, although only in one type of company. In private limited companies (sociedades limitadas), Article 188.1 of the Spanish Companies Act allows the articles of association to depart from the one-share-one-vote principle. This has made multiple-vote shares a common instrument in family businesses and, particularly, in planning for generational succession. They make it possible to confer on one successor the voting rights required to manage the company without altering the economic distribution, which can remain equal among all heirs. In public limited companies (sociedades anónimas), by contrast, Article 96.2 prohibits the issue of shares that alter the proportionality between nominal value and voting rights, with the sole exception of loyalty shares in listed companies (Articles 527 ter to 527 undecies), introduced by Law 5/2021.
It is precisely this prohibition that the draft bill seeks to modify. Its origin lies in Directive (EU) 2024/2810, which forms part of the Listing Act package and must be transposed by 5 December 2026. The Directive is based on a straightforward observation: the fear of losing control discourages many founders from accessing the capital markets because admission to trading entails dilution. The Spanish legislator has also chosen to go beyond the EU minimum requirements, since the Directive requires the mechanism to be recognised only for companies seeking admission to a multilateral trading facility, whereas the draft bill would extend it to companies seeking admission to trading on a regulated market as well.
The key issue, and the most practical consideration for anyone contemplating a move to the public markets, is how the regime is structured. Multiple-vote shares may be issued by unlisted public limited companies, either through the creation of new shares or the conversion of existing shares, and each share may carry a number of votes greater than that which would correspond to it under the proportionality principle.
An amendment to the articles of association authorising such shares would require, both at the first and second shareholders’ meetings, a minimum attendance representing 50% of the voting share capital and the favourable vote of at least 60% of the capital present or represented, although the articles may establish a higher threshold. One essential point should also be noted: the privilege is exclusively political in nature, and these shares may not carry any additional advantage in terms of dividends or liquidation proceeds.
Alongside this, the draft bill establishes a series of safeguards for shareholders who do not hold this class of shares:
- The exercise of multiple voting rights will be suspended until admission to trading, and will automatically lapse, together with all provisions of the articles of association supporting it, if admission to trading does not take place within two years of the resolution approving the issue or conversion;
- Multiple voting rights will automatically lapse once the period specified in the articles of association expires, which may not exceed ten years from the relevant resolution, although the articles may provide for an extension of up to a further ten years; and
- The articles of association may define the matters in respect of which these shares carry additional voting rights, and separate class voting will also be required for the affected classes in resolutions falling under Article 194.1.
These provisions are supplemented by enhanced transparency requirements concerning the shareholding structure, the percentage of capital and voting rights represented by these shares, and any restrictions on their transfer or exercise of voting rights. This information must be included in offering prospectuses, admission documents and annual financial reports. The governing bodies of trading venues will be required to identify these shares clearly and, correspondingly, may not refuse a company’s admission to trading merely because it has issued them.
There is also a consequence that should be anticipated in any transaction structuring exercise: the draft bill amends Articles 108 and 111 of the Securities Markets and Investment Services Act to expressly establish the acquisition of control through the subscription of multiple-vote shares, as well as the acquisition of control resulting from the modification or termination of such multiple voting rights, as circumstances triggering a mandatory takeover bid.
A waiver is nevertheless contemplated where the shareholder acquiring a controlling interest reduces their voting rights below the relevant threshold within a maximum period of three months.
From a practical perspective, companies should begin preparing now:
- Review the articles of association and shareholders’ agreements of companies contemplating an IPO or other route to the public markets in the medium term, checking that the agreed allocation of control is consistent with the class of shares intended to be created;
- Plan the timetable realistically, since the two-year window between the corporate resolution and admission to trading will determine when it is appropriate to adopt the amendment to the articles of association; and
- Incorporate multiple-vote share structures into investment analysis and due diligence, including their expiry period, the scope of the privilege and their impact on control thresholds and any potential mandatory takeover bid obligations.
It should nevertheless be borne in mind that this is still a draft bill under consideration. It is currently subject to public consultation and information procedures and remains pending the mandatory reports and subsequent parliamentary process. The text may therefore change before final approval.
Even so, the direction of travel is clear: the one-share-one-vote principle, which has traditionally been maintained in Spanish public limited company law, is giving way. Control of a company will increasingly depend less on how much capital is held and more on how voting rights have been structured in the articles of association — and on whether that structure has been put in place at the right time.
