Shareholders’ Right to Information: Legal Limits, Key Obligations & Best Practices

The right to information is one of the fundamental pillars that protect shareholders in any commercial company. Far from being a mere privilege, it is a minimum, essential, and inalienable right, according to Spain’s Capital Companies Act (Ley de Sociedades de Capital, LSC) and well-established case law.

This right allows shareholders to participate knowledgeably in company life, exercise their voting rights effectively, and monitor management activities. But how far does this right really extend? What are administrators’ obligations? Can a shareholder misuse it?

An Essential and Unwaivable Right

The right to information is regulated by Article 93 of the LSC, which defines it as one of the shareholder’s basic rights, alongside the right to share in profits, preferential subscription rights, and the right to vote.

This right is particularly strengthened in key corporate events such as:

• Approval of annual accounts

• Amendments to the company’s bylaws

• Mergers, splits, transformations, or liquidations

• Capital increases or reductions

 

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What Can Be Requested and How?

In Limited Liability Companies (S.L.)

According to Article 196 LSC, shareholders can request information:

• In writing, prior to the general meeting

• Orally, during the meeting

Administrators must respond unless:

• The information is unnecessary to protect shareholder rights

• Disclosure would harm the company’s interest

• The information could be used for non-corporate purposes

In Public Limited Companies (S.A.)

Under Article 197 LSC, shareholders can request information:

• In writing, up to 7 days before the general meeting

• Orally, during the meeting

If a question can’t be answered on the spot, a written response must be provided within 7 days after the meeting.

Legal Limits to the Right to Information

This right is not absolute. Laws and courts have established limits to protect the company from misuse or hidden competition. Some scenarios include:

• Abuse of rights: If the right is exercised to block management or harm the company

• Conflict of interest: Requests can be denied if the shareholder runs a competing business and asks for sensitive data

• Former administrators: A shareholder who previously served as an administrator is presumed to know the requested information

• Protecting corporate interests: Administrators may withhold information if disclosure would clearly damage the company

What Happens If the Right Is Violated?

• If the information is essential for a reasonable exercise of voting rights, the resulting resolutions may be challenged.

• The shareholder may seek enforcement of their right and claim damages if applicable (Article 197.5 LSC).

• Not every denial invalidates the meeting: it must be shown that lack of information influenced the average shareholder’s decision.

Best Practices for Companies and Administrators

At Adlanter, as legal experts in corporate law, we recommend:

• Document all information requests and responses in writing

• Review company bylaws: These may set specific limitations or reduce the capital threshold required to access additional information (in S.A., the legal minimum is 5%)

• Make documentation available at the registered office from the time the meeting is announced, especially the annual accounts

• Avoid vague or incomplete responses: These can lead to legal challenges

• Implement internal protocols to manage requests, both before and during general meetings

✅ A Matter of Transparency and Accountability

The right to information is not just a formality—it’s a legitimate control mechanism for shareholders and a legal obligation for administrators. Proper management of this right builds trust in the company and helps prevent disputes, legal claims, and annulments of corporate decisions.

Need help managing shareholder relationships or board obligations? Explore our services in comprehensive business advisory.