Capital Companies Act · 06

Administrators

Title VI, articles 209 to 251: how a company may be run, who may hold the office, why the job is unpaid unless the articles say otherwise, the duties of care and loyalty, what a director may not do with the company’s opportunities, and the two actions that reach their own money.

Unofficial English translation from the Spanish by Voixa Consultors S.L. Alexander Baranov is responsible for the translation. Source: Real Decreto Legislativo 1/2010, consolidated text of the Capital Companies Act, BOE-A-2010-10544 ↗. Check wording, figures, dates and legal effect against the Spanish original before relying on this reading. Source snapshot: 5 November 2026. Provisions applying to the S.A. alone are not reproduced: proportional representation in article 243, co-option in article 244, board resolutions in article 248 and the list of non-delegable powers in article 249 bis, together with chapter VII, article 252, on the partnership limited by shares.

Three articles a foreign director should read first

Article 217 says the office is unpaid unless the articles provide otherwise and set out the system — which means a director drawing a salary under articles that are silent is drawing it without a legal basis. Article 234 says any limit on a director’s power to bind the company is ineffective against third parties, even when it is on the public register. And article 236 says approval by the members does not exonerate: a resolution of the meeting is no shield once the damage is done.

Chapter I. General provisions

Article 209. Competence of the administrative body

The management and the representation of the company, on the terms laid down in this Act, are within the competence of the administrators.

Article 210. Ways of organising the administration

1. The administration of the company may be entrusted to a sole administrator, to several administrators acting jointly and severally or jointly, or to a board of directors.

2. In the public limited company, where joint administration is entrusted to two administrators they shall act jointly, and where it is entrusted to more than two administrators they shall constitute a board of directors.

3. In the limited liability company the articles of association may establish different ways of organising the administration, conferring on the members’ meeting the power to choose between any of them without the need to amend the articles.

4. Any resolution altering the way the administration of the company is organised, whether or not it amounts to an amendment of the articles of association, shall be recorded in a public deed and registered at the Commercial Registry.

Paragraph 3 is a clause worth having from day one. Articles that list all four structures, and let the meeting pick between them, allow a company to move from a sole administrator to two joint administrators, or to a board, by a simple resolution. Articles naming only one structure make every such change an amendment, with the majority in article 199.a) and the cost that goes with it.

Article 211. Determination of the number of administrators

Where the articles of association establish only the minimum and maximum, it falls to the general meeting to determine the number of administrators, subject to no limits other than those established by law.

Chapter II. The administrators

Article 212. Personal requirements

1. The administrators of a capital company may be natural or legal persons.

2. Unless the articles of association provide otherwise, being a member is not required in order to be appointed administrator.

Article 212 bis. Legal person as administrator

1. Where a legal person is appointed administrator, it must designate a single natural person for the permanent exercise of the functions of the office.

2. The revocation of its representative by the legal person acting as administrator shall not take effect until it designates the person who is to replace them. That designation shall be registered at the Commercial Registry on the terms provided for in article 215.

A corporate director cannot leave the seat empty. Revoking the designated individual has no effect until a replacement is named, so the company is never without someone answerable. That individual is also personally and jointly liable under article 236.5 below.

Article 213. Prohibitions

1. The following may not be administrators: unemancipated minors, persons judicially declared incapable, persons disqualified under the Insolvency Act while the disqualification period fixed in the judgment classifying the insolvency has not ended, and those convicted of offences against liberty, against property or against the socio-economic order, against collective security, against the administration of justice, or of any kind of falsification, and those who by reason of their office may not engage in trade.

2. Nor may the following be administrators: public officials with duties relating to the activities of the companies concerned, judges and magistrates, and other persons affected by a statutory incompatibility.

3. For the purposes of this article, any disqualification, or information relevant to disqualification, in force in another Member State of the European Union may be taken into account.

Article 214. Appointment and acceptance

1. Competence to appoint the administrators lies with the members’ meeting, with no exceptions other than those established by law.

2. In the absence of a provision in the articles of association, the general meeting may fix the guarantees the administrators are to provide, or release them from providing them.

3. The appointment of the administrators shall take effect from the moment of its acceptance.

Article 215. Registration of the appointment

1. The appointment of the administrators, once accepted, must be presented for registration at the Commercial Registry, stating the identity of those appointed and, in relation to administrators holding the power to represent the company, whether they may act alone or must act jointly.

2. Presentation for registration must be made within the ten days following the date of acceptance.

Article 216. Alternate administrators

1. Unless the articles of association provide otherwise, alternates to the administrators may be appointed for the case where one or more of them cease to hold office for any reason. The appointment and acceptance of the alternates as administrators shall be registered at the Commercial Registry once the previous holder has ceased.

2. If the articles of association establish a fixed term of office for administrators, the appointment of the alternate shall be understood as made for the period remaining to be served by the person whose vacancy is being filled.

Article 217. Remuneration of the administrators

1. The office of administrator is unpaid, unless the articles of association provide otherwise, determining the system of remuneration.

2. The system of remuneration established shall determine the item or items of remuneration to be received by the administrators in their capacity as such, which may consist, among others, of one or more of the following:

a) a fixed allowance,

b) attendance fees,

c) a share in profits,

d) variable remuneration with general reference indicators or parameters,

e) remuneration in shares or linked to their performance,

f) severance payments, provided that the cessation is not caused by failure to perform the duties of administrator, and

g) such savings or pension systems as are considered appropriate.

3. The maximum amount of the annual remuneration of all the administrators in their capacity as such must be approved by the general meeting and shall remain in force until its amendment is approved. Unless the general meeting determines otherwise, the distribution of the remuneration among the various administrators shall be established by agreement among them and, in the case of a board of directors, by a decision of the board, which must take into account the functions and responsibilities attributed to each director.

4. The remuneration of the administrators must in every case bear a reasonable proportion to the importance of the company, its economic situation at the time and market standards for comparable undertakings. The system of remuneration established must be directed at promoting the long-term profitability and sustainability of the company and must incorporate the safeguards necessary to avoid excessive risk-taking and the rewarding of unfavourable results.

Unpaid is the default, and silence in the articles is not an oversight the law forgives. If the articles say nothing, the office carries no remuneration, and sums paid to a director in that capacity lack a legal basis — which is also why the Spanish tax authorities disallow them as a deductible expense. Fixing it needs two things: a clause in the articles stating the system, and a general meeting resolution setting the maximum annual amount under paragraph 3. A director’s separate employment contract for other work is a different matter, but in an S.L. that contract itself needs a resolution under article 220.

Article 218. Remuneration by a share in profits

1. Where the system of remuneration includes a share in profits, the articles of association shall specifically determine the share or the maximum percentage of it. In the latter case, the general meeting shall determine the percentage applicable within the maximum established in the articles.

2. In the limited liability company, the maximum percentage share may in no case exceed ten per cent of the profits distributable among the members.

3. In the public limited company, the share may be taken only from net profits and after the requirements of the legal and statutory reserves have been met and the shareholders have been recognised a dividend of four per cent of the nominal value of the shares, or the higher rate established by the articles of association.

Article 220. Provision of services by the administrators

In the limited liability company, the establishment or modification of any kind of relationship for the provision of services or works between the company and one or more of its administrators shall require a resolution of the general meeting.

Any services contract between the company and its own director needs the members’ approval. Article 220 is not confined to large arrangements: it covers establishing or modifying any services or works relationship. A consultancy agreement, a management contract, a raise under an existing one — each needs a resolution. Paired with article 230.2, which also sends financial assistance and guarantees in a director’s favour to the meeting, it leaves little that a sole administrator may arrange with themselves alone.

Article 221. Term of office

1. The administrators of a limited liability company shall hold office for an indefinite period, unless the articles of association establish a fixed term, in which case they may be re-elected one or more times for periods of equal duration.

2. The administrators of a public limited company shall hold office for the period stated in the articles of association, which may not exceed six years and must be the same for all of them.

The administrators may be re-elected to office, one or more times, for periods of the same maximum duration.

Article 222. Lapse

The appointment of the administrators shall lapse where, the term having expired, a general meeting has been held or the period for holding the meeting that is to resolve on the approval of the previous year’s accounts has elapsed.

Article 223. Removal of the administrators

1. The administrators may be removed from office at any time by the general meeting, even if the removal does not appear on the agenda.

2. In the limited company the articles of association may require, for the removal resolution, a reinforced majority which may not exceed two thirds of the votes corresponding to the quotas into which the share capital is divided.

Removal needs no notice and no cause. Paragraph 1 lets the meeting remove an administrator even though the item is not on the agenda — an exception to the rule that members may only resolve on what was convened. A director who attends an ordinary meeting on the accounts can leave it no longer a director. The only protection available is the reinforced majority in paragraph 2, capped at two thirds, and it has to be in the articles in advance.

Chapter III. Duties of the administrators

Article 225. General duty of care

1. The administrators must perform the office and comply with the duties imposed by law and by the articles of association with the diligence of an orderly businessperson, having regard to the nature of the office and the functions attributed to each of them; and must in every case subordinate their personal interest to the interest of the undertaking.

2. The administrators must devote adequate dedication and shall adopt the measures necessary for the proper direction and control of the company.

3. In performing their functions, the administrator has the duty to require, and the right to obtain from the company, the appropriate and necessary information to enable them to comply with their obligations.

Article 226. Protection of business discretion

1. In the field of strategic and business decisions subject to business discretion, the standard of diligence of an orderly businessperson shall be regarded as met where the administrator has acted in good faith, without a personal interest in the matter decided, with sufficient information and in accordance with an appropriate decision-making procedure.

2. Decisions personally affecting other administrators and related persons shall not be regarded as falling within the field of business discretion, and in particular those whose object is to authorise the transactions provided for in article 230.

The business judgment rule exists in Spanish law, with four conditions. Good faith, no personal interest, sufficient information, and a proper decision procedure. Meet them and a commercial decision that turned out badly is not a breach of the duty of care. The fourth condition is the one most often missing in a small company: no record of how the decision was taken.

Article 227. Duty of loyalty

1. The administrators must perform the office with the loyalty of a faithful representative, acting in good faith and in the best interest of the company.

2. Breach of the duty of loyalty shall give rise not only to the obligation to compensate the damage caused to the company’s assets, but also to the obligation to return to the company the unjust enrichment obtained by the administrator.

Loyalty carries a second remedy that care does not. A breach of the duty of care produces damages. A breach of loyalty produces damages and disgorgement: whatever the administrator gained goes back to the company, whether or not the company lost it. Taking a business opportunity that the company could not have financed is still a gain to be returned.

Article 228. Basic obligations arising from the duty of loyalty

In particular, the duty of loyalty obliges the administrator to:

a) Not exercise their powers for purposes other than those for which they were granted.

b) Keep secret the information, data, reports or background material to which they have had access in performing the office, even after they have ceased to hold it, except in cases where the law permits or requires otherwise.

c) Abstain from taking part in the deliberation and voting on resolutions or decisions in which they or a related person has a direct or indirect conflict of interests. Resolutions or decisions affecting them in their capacity as administrator, such as their appointment or removal from positions on the administrative body or others of analogous meaning, are excluded from that duty to abstain.

d) Perform their functions under the principle of personal responsibility, with freedom of judgment and independence from instructions and connections of third parties.

e) Adopt the measures necessary to avoid situations in which their interests, whether on their own account or on behalf of another, may come into conflict with the company’s interest and with their duties towards the company.

Letter d) binds the director appointed by an investor. A director nominated by a shareholder, a fund or a parent company owes their judgment to the company, not to whoever put them there. Voting as instructed, without forming an independent view, is itself a breach of loyalty.

Article 229. Duty to avoid situations of conflict of interest

1. In particular, the duty to avoid situations of conflict of interest referred to in letter e) of article 228 obliges the administrator to abstain from:

a) Carrying out transactions with the company, except where they are ordinary transactions, made on standard terms for customers and of minor significance, meaning those information on which is not necessary to give a true and fair view of the entity’s assets, financial position and results.

b) Using the company’s name or invoking their position as administrator in order to influence private transactions unduly.

c) Making use of the company’s assets, including its confidential information, for private purposes.

d) Taking advantage of the company’s business opportunities.

e) Obtaining benefits or remuneration from third parties other than the company and its group in connection with the performance of their office, unless these are mere courtesies.

f) Carrying on activities, on their own account or on behalf of another, that entail effective competition, whether actual or potential, with the company, or that otherwise place them in a permanent conflict with the company’s interests.

2. The foregoing provisions shall also apply where the beneficiary of the prohibited acts or activities is a person related to the administrator.

3. In every case, administrators must inform the other administrators and, where applicable, the board of directors or, in the case of a sole administrator, the general meeting, of any situation of direct or indirect conflict that they or persons related to them may have with the company’s interest.

Situations of conflict of interest in which administrators find themselves shall be reported in the annual report referred to in article 259.

A sole administrator has to disclose their conflicts to the members. Paragraph 3 has no exception for one-person boards: where there is a sole administrator, the disclosure goes to the general meeting. It then has to appear in the annual report, which is filed at the registry and is public.

Letter a) is narrower than “no self-dealing”. Transactions with the company are permitted where they are ordinary, on standard customer terms, and minor — with “minor” defined by reference to what the accounts need to disclose. Anything outside that needs the dispensation in article 230.

Article 230. Mandatory nature and dispensation

1. The regime relating to the duty of loyalty and to liability for its breach is mandatory. Provisions in the articles of association that limit it or are contrary to it shall not be valid.

2. Notwithstanding the preceding paragraph, the company may dispense from the prohibitions contained in the preceding article in individual cases, authorising an administrator or a related person to carry out a particular transaction with the company, to use certain company assets, to take advantage of a specific business opportunity, or to obtain a benefit or remuneration from a third party.

The authorisation must necessarily be given by the general meeting where its object is dispensation from the prohibition on obtaining a benefit or remuneration from third parties, or where it concerns a transaction whose value exceeds ten per cent of the company’s assets. In limited liability companies, the authorisation must also be given by the general meeting where it relates to the provision of any kind of financial assistance, including guarantees by the company in favour of the administrator, or where it is directed at establishing a services or works relationship with the company.

In the remaining cases, the authorisation may also be given by the administrative body, provided that the independence of the members granting it from the administrator being dispensed is guaranteed. It must also be ensured that the authorised transaction is harmless to the company’s assets or, where appropriate, that it is carried out on market terms, and that the process is transparent.

3. The obligation not to compete with the company may be dispensed from only where no harm to the company is to be expected, or where the harm to be expected is offset by the benefits expected from the dispensation. The dispensation shall be granted by an express and separate resolution of the general meeting.

In every case, at the request of any member, the general meeting shall resolve on the removal of an administrator carrying on competing activities where the risk of harm to the company has become material.

The articles cannot soften any of this. Paragraph 1 makes the loyalty regime mandatory and voids any clause limiting it. Relief comes only case by case, through dispensation, and for the heavier cases only from the general meeting: third-party benefits, transactions above ten per cent of assets, and — in an S.L. — any financial assistance or guarantee in the director’s favour and any services relationship.

Permission to compete is possible, and it is separate. Under paragraph 3 the members may release an administrator from the non-compete, but only where no harm is expected or the expected harm is outweighed, and only by an express resolution dealing with that alone. It cannot be bundled into an omnibus approval.

Article 231. Persons related to the administrators

1. For the purposes of the preceding articles, the following shall be regarded as persons related to the administrators:

a) The administrator’s spouse or persons in an analogous emotional relationship.

b) The ascendants, descendants and siblings of the administrator or of the administrator’s spouse.

c) The spouses of the ascendants, descendants and siblings of the administrator.

d) Companies or entities in which the administrator holds, directly or indirectly, including through an intermediary, an interest giving them significant influence, or in which, or in whose parent company, they hold a position on the administrative body or in senior management. For these purposes, any interest equal to or greater than 10 per cent of the share capital or of the voting rights, or by reason of which representation on the company’s administrative body has been obtained in fact or in law, is presumed to confer significant influence.

e) The members represented by the administrator on the administrative body.

2. In the case of an administrator that is a legal person, the following shall be regarded as related persons:

a) The members who are, in relation to the legal person acting as administrator, in any of the situations contemplated in article 42(1) of the Commercial Code.

b) The de jure or de facto administrators, the liquidators and the holders of general powers of attorney of the legal person acting as administrator.

c) Companies forming part of the same group and their members.

d) Persons who, in relation to the representative of the legal person acting as administrator, are regarded as persons related to administrators in accordance with the preceding paragraph.

Ten per cent is enough to make another company a related person. Letter d) presumes significant influence at a holding of 10 per cent of capital or votes, or wherever board representation was obtained. A director with a modest stake in a supplier brings that supplier inside the conflict rules.

Article 232. Actions arising from breach of the duty of loyalty

The bringing of the liability action provided for in articles 236 and following does not preclude the bringing of actions for challenge, cessation, removal of effects and, where appropriate, annulment of the acts and contracts entered into by the administrators in breach of their duty of loyalty.

Chapter IV. Representation of the company

Article 233. Attribution of the power of representation

1. In a capital company the representation of the company, in and out of court, falls to the administrators in the manner determined by the articles of association, without prejudice to the following paragraph.

2. The attribution of the power of representation shall be governed by the following rules:

a) In the case of a sole administrator, the power of representation shall necessarily fall to that administrator.

b) Where there are several joint and several administrators, the power of representation falls to each administrator, without prejudice to provisions in the articles of association or resolutions of the meeting on the distribution of powers, which shall have merely internal effect.

c) In the limited liability company, where there are more than two joint administrators, the power of representation shall be exercised jointly by at least two of them in the manner determined in the articles of association. If the company is a public limited company, the power of representation shall be exercised jointly.

d) In the case of a board of directors, the power of representation falls to the board itself, acting collectively. However, the articles of association may attribute the power of representation to one or more members of the board individually or jointly.

Where the board, by a resolution of delegation, appoints an executive committee or one or more managing directors, the rules governing their action shall be indicated.

Article 234. Scope of the power of representation

1. The representation shall extend to all acts comprised within the corporate object as defined in the articles of association.

Any limitation of the representative powers of the administrators, even if registered at the Commercial Registry, shall be ineffective against third parties.

2. The company shall be bound towards third parties who have acted in good faith and without gross negligence, even where it appears from the articles of association registered at the Commercial Registry that the act does not fall within the corporate object.

Internal limits do not travel. A clause saying the administrator may not sign above a given amount without the members’ approval binds the administrator and nobody else: paragraph 1 makes it ineffective against third parties even when it is on the public register. The counterparty keeps the contract; the company’s remedy is against its own director. Paragraph 2 goes further still, binding the company even outside its stated object where the third party acted in good faith.

Article 235. Notifications to the company

Where the administration has not been organised on a collective basis, communications or notifications to the company may be addressed to any of the administrators. In the case of a board of directors, they shall be addressed to its chair.

Chapter V. Liability of the administrators

Article 236. Conditions and subjective scope of liability

1. The administrators shall be liable to the company, to the members and to the company’s creditors for the damage they cause by acts or omissions contrary to the law or to the articles of association, or by acts carried out in breach of the duties inherent in the office, provided that there has been wilful misconduct or negligence.

Fault shall be presumed, unless the contrary is proved, where the act is contrary to the law or to the articles of association.

2. The fact that the harmful act or resolution was adopted, authorised or ratified by the general meeting shall in no case exonerate from liability.

3. The liability of the administrators extends equally to de facto administrators. To that end, a de facto administrator means both a person who in actual practice performs the functions of an administrator without title, with a void or expired title, or under another title, and, where appropriate, the person on whose instructions the company’s administrators act.

4. Where there is no permanent delegation of the board’s powers to one or more managing directors, all the provisions on the duties and liability of administrators shall apply to the person, whatever their title, holding the most senior management powers in the company, without prejudice to the company’s actions based on its legal relationship with that person.

5. The natural person designated for the permanent exercise of the functions of the office of a legal person acting as administrator must meet the legal requirements established for administrators, shall be subject to the same duties, and shall be jointly and severally liable with the legal person acting as administrator.

Paragraph 2 removes the comfort most directors assume they have. Getting the members to approve, authorise or ratify the act does not exonerate the administrator. A resolution of the meeting may settle the relationship between director and members; it does not bind creditors, and it does not answer a later claim that the act was contrary to law or to the articles.

Paragraph 3 reaches the person giving the orders. Liability extends to de facto administrators, defined to include both someone acting as a director without a valid appointment and the person on whose instructions the formal directors act. A founder who resigns the office but keeps running the company, or a parent company that directs its subsidiary’s board, is inside this provision.

Fault is presumed where the act broke the law or the articles. Under the second sub-paragraph of paragraph 1 the claimant does not have to prove negligence in those cases: the administrator has to disprove it.

Article 237. Joint and several nature of the liability

All the members of the administrative body that adopted the resolution or carried out the harmful act shall be jointly and severally liable, except those who prove that, not having taken part in its adoption and execution, they were unaware of its existence or, being aware of it, did everything appropriate to avoid the damage or, at the least, expressly opposed it.

Three escape routes, and all of them require evidence. A co-director escapes only by proving they did not take part and did not know, or knew and did everything appropriate to prevent the harm, or at the least expressly opposed it. “Expressly opposed” means on the record — a dissent in the minutes. Silence at a board meeting is not opposition.

Article 238. Corporate liability action

1. The liability action against the administrators shall be brought by the company, following a resolution of the general meeting, which may be adopted at the request of any member even if it does not appear on the agenda. The articles of association may not establish a majority other than the ordinary one for the adoption of this resolution.

2. The general meeting may at any time compromise or waive the bringing of the action, provided that members representing five per cent of the share capital do not oppose it.

3. A resolution to bring the action or to compromise it shall entail the removal of the administrators concerned.

4. The approval of the annual accounts shall not prevent the bringing of the liability action, nor shall it imply a waiver of the action resolved upon or brought.

Five per cent can block a settlement. The majority may decide to waive or settle the claim against a director, but paragraph 2 lets holders of five per cent stop it. And the resolution to sue automatically removes the director under paragraph 3 — no separate removal vote is needed.

Article 239. Standing of the minority

1. A member or members holding, individually or jointly, an interest allowing them to request the convening of the general meeting may bring the liability action in defence of the company’s interest where the administrators have not convened the general meeting requested for that purpose, where the company does not bring the action within one month from the date of the corresponding resolution, or where that resolution was against calling the administrators to account.

The member or members referred to in the preceding paragraph may bring the corporate liability action directly, without having to submit the decision to the general meeting, where it is based on a breach of the duty of loyalty.

2. Where the claim is upheld in whole or in part, the company shall be obliged to reimburse the claimant for the necessary costs incurred, within the limits provided for in article 394 of Law 1/2000 of 7 January on Civil Procedure, unless the claimant has obtained reimbursement of those costs or the offer of reimbursement was unconditional.

A breach of loyalty goes straight to court. For everything else the minority must first ask the meeting and wait. Where the claim is that the director breached the duty of loyalty, five per cent may sue in the company’s name without asking the meeting at all — which matters precisely in the case where the director controls the majority.

Article 240. Subsidiary standing of creditors to bring the corporate action

The company’s creditors may bring the corporate liability action against the administrators where it has not been brought by the company or its members, provided that the company’s assets are insufficient to satisfy their claims.

Article 241. Individual liability action

Actions for compensation that may be available to members and to third parties for acts of administrators that directly harm their interests are unaffected.

Article 241 bis. Limitation of liability actions

The liability action against the administrators, whether corporate or individual, shall be time-barred four years from the day on which it could have been brought.

Chapter VI. The board of directors

Article 242. Composition

1. The board of directors shall be made up of a minimum of three members. The articles of association shall fix the number of members of the board, or the maximum and the minimum, in which case it falls to the members’ meeting to determine the specific number of its members.

2. In the limited liability company, where there is a board of directors, the maximum number of members of the board may not exceed twelve.

Article 245. Organisation and functioning of the board of directors

1. In the limited liability company the articles of association shall establish the rules governing the organisation and functioning of the board of directors, which must in every case include the rules for convening and constituting the body and the manner of deliberating and adopting resolutions by majority.

3. The board of directors must meet at least once a quarter.

An S.L. with a board must write the board’s own rules into its articles. Unlike the S.A., where the board may regulate itself, article 245.1 requires the articles of a limited company to set out how the board is convened, constituted and how it votes. Template articles drafted for a sole administrator will not contain any of that, and moving to a board without amending them leaves the board without valid procedure.

Article 246. Convening the board of directors

1. The board of directors shall be convened by its chair or by the person acting in that capacity.

2. Administrators constituting at least one third of the members of the board may convene it, stating the agenda, to be held in the locality where the registered office is situated, if, having so requested the chair, the chair has not without justified cause given notice within one month.

Article 247. Constitution of the board of directors

1. In the limited liability company the board of directors shall be validly constituted where the number of directors provided for in the articles of association attend, present or represented, provided that they amount to at least a majority of the members.

Article 249. Delegation of powers of the board of directors

1. Where the articles of association of the company do not provide otherwise, and without prejudice to the powers of attorney it may confer on any person, the board of directors may appoint from among its members one or more managing directors or executive committees, establishing the content, limits and procedures of the delegation.

2. The permanent delegation of any power of the board of directors to the executive committee or to the managing director, and the designation of the administrators who are to hold those positions, shall require, in order to be valid, the favourable vote of two thirds of the members of the board, and shall not take effect until registered at the Commercial Registry.

3. Where a member of the board of directors is appointed managing director, or is attributed executive functions under another title, a contract must be concluded between that person and the company, which must be approved in advance by the board of directors with the favourable vote of two thirds of its members. The director concerned must abstain from attending the deliberation and from taking part in the vote. The approved contract must be attached as an annex to the minutes of the meeting.

4. The contract shall set out in detail all the items for which the director may obtain remuneration for performing executive functions, including, where appropriate, any compensation for early termination of those functions and the amounts payable by the company by way of insurance premiums or contributions to savings systems. The director may not receive any remuneration for performing executive functions whose amounts or items are not provided for in that contract.

No contract, no pay for executive work. The last sentence of paragraph 4 is absolute: a managing director may receive nothing for executive functions that is not set out in the contract approved by two thirds of the board, with the director abstaining and the contract annexed to the minutes. This, and article 217 above, are the two provisions behind most Spanish disputes about directors’ pay.

Article 250. Minutes of the board of directors

The discussions and resolutions of the board of directors shall be entered in a minute book, and shall be signed by the chair and the secretary.

Article 251. Challenging resolutions of the board of directors

1. The administrators may challenge resolutions of the board of directors, or of any other collective administrative body, within thirty days of their adoption. Members representing one per cent of the share capital may likewise challenge such resolutions, within thirty days from the time they became aware of them, provided that one year has not elapsed since their adoption.

2. The grounds of challenge, the procedure and the effects shall be governed by the provisions on challenging resolutions of the general meeting, with the particular feature that, in this case, a challenge shall also lie for breach of the board’s own rules.

Thirty days, not a year. Board resolutions have a much shorter window than those of the general meeting: thirty days from adoption for a director, thirty days from knowledge for a one per cent member, with an outside limit of a year.

Where this sits

Title VII, on the next page, covers the annual accounts: who draws them up and when, what the annual report must disclose, when an audit is required, approval and the duty to file at the registry. The last page in this series deals with dissolution and liquidation, including the personal liability an administrator incurs by failing to act on losses.

Nothing here is advice on your own position, and this reading is not the official text. Spain publishes no official English version of this Act; where the wording matters to a decision, read it against the Spanish original linked above.