Presence of a notary at the shareholders’ meeting

The presence of a notary public and the public faith that he or she imparts in many of the commercial activities that are carried out on a daily basis means that he or she is even more in demand when conflicts arise or are foreseen, in order to guarantee the impartiality of the acts, also transmitting calm to the attendees.

The Capital Companies Act even includes the possibility of one of these public notaries being present at shareholders’ meetings, providing legal certainty to the act.

Article 203 of the Capital Companies Act expressly includes the possibility of the presence of a notary public at General Meetings, specifically stating that:

1. “The directors may require the presence of a notary to draw up the minutes of the general meeting, and are obliged to do so if this is requested by shareholders representing at least one per cent of the share capital in the case of a public limited company or five per cent in the case of a private limited company five days before the meeting is due to be held. In this case, the resolutions shall only be effective if they are recorded in the notarial minutes.

2. The notarial minutes shall not be subject to approval, shall be deemed to be the minutes of the meeting, and the resolutions recorded therein may be implemented as of the date of their execution.

3. The notary’s fees shall be paid by the company.”

With regard to the above, we would like to point out that it is the management organ that is responsible for requesting the presence of the notary and not always the individual director.

In practice, the voluntary application of this article takes place especially in companies which are marked by conflicts and whose shareholders seek protection, especially minority shareholders.

Notaries are empowered to draw up this type of deed on the basis of the Regulation on the Organisation and Regime of the Notary’s Office, Article 198 specifically states that:

“Notaries shall, at the request of a party in all cases, draw up and authorise deeds in which the facts and circumstances that they witness or are aware of, and which by their nature are not the subject of a contract, are recorded”.

On the other hand, and to avoid errors, we must distinguish whether it is a mere act of presence or if it is the minutes of a General Meeting.

In this specific case of the General Meetings, drafting the minutes means that the public notary is present at the meeting or the meeting itself is held at the Notary’s office, and the Notary drafts a document that records what happened and explains the existence of the proposed meeting, guarantees whether the meeting was convened respecting the legal term, if the call is correct and if the call mentions the name of the company, the time, date, agenda, and the body that convened it, and what was agreed in said meeting. In general, if it has been correctly convened according to law and the agreements reached. However, the notary does not assess the legality of the possible agreements and statements of the participants; that is no longer his role.

Once the minutes are drafted, they will become part of the minutes book, along with the rest that the company has. We must know that, based on Article 203 mentioned, whoever requests the minutes, the Notary’s fees will be charged to the company.

Thus, the Directorate-General for Registries and Notaries in Resolution number 9823 of July 19, 2017, emphasizes the Notary’s role in the General Meeting, stating the following:

“In this sense, it is convenient to bring up the Resolution of the DGRN of February 18, 2014, in which it is said: ‘As for the minutes of the General Meeting, it corresponds to the president of the Meeting to direct it, without corresponding to the Notary more than to certify ‘the agreements adopted at the Meeting and to record the interventions of those present, whose record in the minutes has been requested, without issuing judgments on the goodness of the agreements.'”

Therefore, it is the president of the Meeting alone who is competent to direct the session of the General Meeting, being responsible for it, both in relation to the proposals submitted to vote, the deliberation, and the results of the votes. Likewise, it corresponds exclusively to the president of the Meeting, the decision to extend, interrupt, continue, or conclude the sessions of the Meeting, with the Notary’s role being only to certify the facts or concurrent circumstances.”

We cannot forget this important right that the law recognizes to minority shareholders with 5% or more in limited companies and with 1% or more in public limited companies, which is often the great unknown. If the presence of the Notary is requested at a Meeting and the Notary is not convened, it would be null and, consequently, all its agreements.