Starting a business with a partner often seems like the perfect combination. Different skills, networks and ideas come together, increasing the chances of success. Yet, when everything is running smoothly, many entrepreneurs overlook the importance of making clear agreements from the outset.
In our daily practice, we regularly see shareholder disputes arise not because of bad intentions, but because key arrangements were never properly documented.
Clear agreements prevent major problems
Many entrepreneurs establish a Spanish company together and divide the shares among themselves. Often, the assumption is:
“We can sort that out later.”
But what happens if:
- one shareholder wants to leave the company?
- a shareholder becomes incapacitated or passes away?
- disagreements arise regarding investments or profit distributions?
- a shareholder wishes to sell their shares to a third party?
Without clear agreements, these situations can quickly lead to lengthy discussions, business disruption and even legal disputes.
“A well-drafted shareholders’ agreement protects not only your business, but also the relationship between the shareholders.”
A Shareholders’ Agreement as a safety net
In addition to the company’s articles of association, a shareholders’ agreement can provide valuable protection and certainty. It allows shareholders to regulate matters that are often not fully addressed in the articles.
Examples include:
- voting rights and decision-making procedures;
- dividend and profit distribution policies;
- transfer and sale of shares;
- non-compete and non-solicitation provisions;
- dispute resolution mechanisms;
- exit arrangements.
For international businesses operating in Spain, these agreements can be particularly important. Differences in business culture, expectations and communication styles can easily lead to misunderstandings if arrangements are not clearly documented.
Not Just for large companies
A common misconception is that shareholders’ agreements are only relevant for large corporations. In reality, they are often even more valuable for SMEs and family-owned businesses, where personal relationships play a significant role.
The better the agreements are structured from the beginning, the lower the risk that business disagreements will develop into personal conflicts later on.
“Strong business partners trust each other. That is precisely why they put their agreements in writing before problems arise.”
Conclusion
Having multiple shareholders creates significant opportunities, but also introduces additional risks. By establishing clear legal arrangements from the outset, you create stability, transparency and continuity for the business.
Not because you expect conflict, but because you are committed to building a successful future together.
Why OTIS?
At OTIS Legal Group, we support international businesses operating in Spain on a daily basis. We not only assist with the incorporation of Spanish companies, but also advise on the legal framework needed to support long-term growth.
A shareholders’ agreement is never a one-size-fits-all document. Every company, shareholder and business situation is unique. That is why we take the time to understand our clients’ objectives, risks and future plans before drafting tailored agreements that truly fit their needs.
With our international team, we provide legal assistance in Dutch, Spanish and English, ensuring that all parties fully understand their rights, obligations and expectations.
Meet our team:
https://otislegalgroup.com/team/
Want to know more?
Do you already have a company in Spain with multiple shareholders, or are you planning to start a business with a partner?
Feel free to contact OTIS Legal Group. We would be pleased to discuss a legal structure that supports both your business goals and your long-term plans.
