Many companies and law firms are increasingly encountering major practical and legal obstacles when it comes to collecting signatures on corporate minutes, both for shareholders’ meetings and board meetings.
Therefore, it is necessary to find a clear legal framework and a useful tool that allows this process to be carried out in a secure, efficient, and quick manner. Ultimately, legal professionals are demanding solutions that make it possible to digitally sign corporate documentation (minutes, agreements, resolutions, attendance sheets, voting slips) and, as far as possible, automate the entire process from what is known as corporate governance. A process that, due to its legal complexity (where technology can help), is often delayed in the drafting of agreements due to a non-automated aspect that wastes time: simple agreements, obtaining signatures, the format of the minutes, the data of each member (name, surname, address, their shares, etc.).
But is it possible to digitalize this process? Which parts?
Digital summons
As everyone knows, Article 173 of the Spanish Companies Act (LSC) states that the call for the shareholders’ meeting (also applicable to board meetings) must be made through one of the following means:
- Publication in the Official Gazette (BORME);
- Publication on the company’s corporate website;
- An individual written communication sent to the shareholder’s designated address (the DGRN allows an email address) and ensuring receipt by the shareholders.
So, if we want to summon digitally, we must rely on this last possibility, since it is the only one that does not require public publication.
Moreover, it is no longer necessary to summon by certified mail, not even the acknowledgment of receipt of a regular email (DGRN, July 19, 2019). However, this must be explicitly stated in the corporate bylaws.
In this link you will find the statutory clause that should be incorporated into the bylaws.
Digital voting: early or online
Apart from the official summons, it remains to be clarified whether communication from the shareholder to the company, in the opposite direction, is also valid in digital format.
To address this, we must turn to the Spanish Companies Act (LSC) and the doctrine of the DGRN. The first indicates (1) that telematic attendance at the meeting is valid, (2) that advance voting via telematic means is valid, and (3) the delegation of the vote via telematic means. The LSC explicitly states this possibility for public limited companies (S.A.). However, this raises two questions:
- Is it therefore prohibited for limited liability companies (S.L.)?
- What kind of signature or reliability is required to validate the shareholder’s will?
The answer to these questions has been provided by the DGRN (Resolution of April 25, 2017). Regarding S.L.s, it stated that the same rules applicable to S.A.s can also apply to S.L.s. As for the reliability or validity of the shareholder’s signature, it clarified that there is no requirement for an advanced electronic signature or a recognized certificate, but rather that a simple electronic signature (to be understood as: a login and password, or a click, or sending an email) would suffice. However, this must be expressly stated in the bylaws.
Specifically, the clause discussed in the DGRN states the following:
“(…) The vote cast by the shareholder in writing with a valid signature, or through a telematic document sent with a recognized electronic signature, will also be valid. Nevertheless, the Board may accept other means without requiring signature verification or electronic signature. (…)”
And this applies both to the issuance of the vote and to the signing of any corporate document.
Finally, it should be noted that, despite the lack of explicit provision in the above-mentioned clause, the validity of certain documents signed with a simple electronic signature may also be accepted in practice. This includes private agreements and decisions adopted unanimously by all partners or shareholders. These documents may be presented to the Commercial Registry or other authorities without opposition. If there is no express prohibition in the bylaws or conflicting judicial rulings (which do not exist, according to the DGRN), there is no obstacle to the legal validity of these electronically signed documents.
Approval of the minutes
The approval of the minutes is an act that can raise many doubts. However, it is common practice to send the minutes (from a universal meeting) to all shareholders for them to sign, and the administrator can then feel more or less at ease. But the reality is far from that. First of all, the way universal meeting minutes are signed is currently considered falsification of a commercial document. But leaving that aside, what exactly is the approval of the minutes?
- The approval of the minutes is not an agreement, it lacks legal substance, and therefore, it should not be included on the agenda;
- The approval of the minutes is a probative, not ceremonial, act: it serves as proof that the meeting took place and that the agreements are enforceable as of the approval of each of them;
- Approval can be given tacitly through “non-opposition” to the content of the minutes;
- It can be approved at the end of the meeting itself or, later, within 15 days, by two shareholders representing both the minority and the majority, who must be elected at the end of the meeting;
In this sense, the approval itself does not require anyone’s signature, except in cases where approval by two attending shareholders is chosen, in which case they must sign the minutes indicating their approval. In such case, to make digital signing easier, the minutes may be sent to those shareholders via telematic means that allow them to sign from a device (mobile, computer, tablet). Moreover, an advanced electronic signature would not be necessary unless otherwise required in the bylaws.
Digital signature of the board minutes
We’ve seen that approval does not necessarily require anyone’s signature. However, a signature will be mandatory in the following cases:
- Universal meeting: all shareholders, and the chair and secretary of the meeting;
- Ordinary/extraordinary meeting: chair and secretary of the meeting;
- Shareholders’ meeting in writing and without session: person with authority to certify.
It is at this point that the method of signing such documentation comes into play: the digital signature of the minutes. As we have mentioned, an advanced electronic signature is not required to sign corporate documentation, a simple electronic signature will suffice. This may consist of:
- A handwritten signature made on the screen of a device;
- Or simply metadata (not visible to the user), that is, digital evidence generated by a user clicking a button (it would simply be enough for the user to enter a code or log in with a username and password: boardchainapp.com has this model).
Digital certification of the minutes
Certification of the minutes, unfortunately (for legal reasons) or fortunately (for legal security), cannot be digitally signed. Therefore, although there are tools that automatically generate the certification of the minutes, the official validation of the same requires a handwritten signature (a traditional, physical one).
Fortunately, today all these problems —both digital signature and process automation— have a technical and legal solution in our legal system, and it’s called Boardchain (www.boardchainapp.com).
If you’re curious about the digitalization of this or other legal processes, feel free to contact us and we’ll be happy to help.
