The essential asset in Capital Companies

Competence of the General Meeting or does it depend?

Article 160 of the Capital Companies Law (hereinafter, LSC) includes those matters whose resolutions must be approved by the general meeting, and which are excluded from the powers of the company’s administrative body.

Competence of the General Meeting. Social object of the company.

In accordance with the provisions of section f) of the same article, it will be the responsibility of the general meeting to deliberate and agree on “The acquisition, disposal or contribution to another company of essential assets. The essential nature of the asset is presumed when the amount of the operation exceeds twenty-five percent of the value of the assets that appear in the last approved balance sheet.

Since the introduction of this article in 2014, a broad debate has arisen around the definition of an essential asset. In general, in accordance with the provisions of the aforementioned precept, the condition of essential asset of the good whose value exceeds 25% of the total assets of the balance sheet is presumed. In this context, to determine the essential nature of the asset, the value of the operation must be considered, discarding accounting values ​​in any case.

However, most of the doctrine understands that this is not an exclusive criterion to determine the essentiality of an asset, but rather it is a mere presumption. This presumption, which admits evidence to the contrary, implies that, if the asset sold or acquired exceeds 25% of the total assets of the company, the administrator of the company will have to verify that it really is an essential asset.

In this way, in the case of a company whose corporate purpose is the purchase and sale of real estate, the administrative body will have full competence for the real estate purchase and sale operations without the need for prior agreement from the general meeting, and this, even though the value of such operations exceed 25% of the total assets, since it is understood that these types of actions are part of the company’s ordinary activity.

Likewise, the case may arise in which, although the value of the operation does not exceed 25% of the total assets, this is considered an essential asset and, therefore, the agreement of the general meeting will be required for its execution. This would be the case, for example, of a company whose corporate purpose is the manufacture of textiles and intends to sell the property in which its factory is located, which, although it does not exceed 25% of the total assets, is considered essential considering to the corporate purpose and, consequently, requires prior agreement of the general meeting.

From all this, the conclusion is drawn that, to determine whether the essentiality of an asset exists, one must look at the corporate purpose of each company.

Competence of the General Meeting. Failure to adopt agreement.

Once this debate has been clarified, the next question that arises is what happens if the requirement of adoption of prior agreement by the board is not met in operations relating to assets in which the condition of essentiality is met.

In this regard, the position of the General Directorate of Security and Public Faith is clear in its Resolution of November 21, 2022, establishing that the company will be obliged to third parties who have acted in good faith and without serious fault in accordance with the provisions. provided by article 234 LSC. Furthermore, the company will be entitled to demand liability from the administrator if his actions have overlooked the essential nature of the assets in question.

In the same resolution and in other previous ones, the Management rules on the provision of a certificate or statement by the administrator in order to declare the non-essentiality of the asset. It is determined that there is no obligation to make this type of contributions or statements, and its omission is not a defect that prevents registration. However, it does estimate that “with the statement contained in the deed regarding the non-essential nature of such asset, the position of the counterparty is improved in terms of its duty of diligence and assessment of serious negligence.”

Therefore, under this pretext, it is advisable, especially in case of doubt about the essentiality of the asset, that the administrative body convene the meeting to authorize the operation. This will be the way that the administrator will have to avoid incurring liability.

What role do the notary and the property registrar play?

Finally, the notary granting the public deed must carry out due diligence on the suitability of the business when the asset is considered essential, requesting, among other possible measures, that it be proven that the presumption of an essential asset of the article does not exist. 160. f) LSC. Likewise, the registrar may qualify the essential nature of the asset when it is clearly evident.