Virtual general meetings in Limited Liability Companies (SL)

Virtual general meetings in Limited Liability Companies (SL)

In the realm of business digitalisation, virtual general meetings have emerged as a vital tool for managing Limited Liability Companies (LLC) (SL or Sociedades Limitadas in Spanish). This model enables members to make collective decisions from anywhere, adapting to the demands of a modern, globalised environment.

The enactment of Law 5/2021, which amended the Spanish Companies Act (Ley de Sociedades de Capital, LSC), introduced the concept of exclusively virtual meetings as a permanent option for LLCs, provided that their articles of association explicitly allow it. These meetings enable members to interact and exercise their rights to participate, vote, and deliberate through secure digital platforms that ensure authenticity and safety.

The current legal framework responds to the need to adapt business practices to technological advancements, overcoming the constraints of physical presence and ensuring operational continuity in critical contexts.

For an LLC to hold virtual general meetings, specific technical and legal requirements must be met:

1. Provision in the articles of association: the company’s articles of incorporation must include a specific clause authorising exclusively virtual meetings. Introducing this clause requires approval during a physical or hybrid meeting, following the majorities established by the LSC.
2. Technological guarantees: the technology used must reliably identify members, allow real-time transmission of the meeting, and ensure the exercise of members’ rights to speak and vote throughout the session.
3. Notice and quorum: notices must comply with the legal deadlines and requirements, ensuring all members have access to the necessary digital tools. The quorum depends on the matters under discussion. For strategic decisions, the approval of at least two-thirds of the capital present or represented is generally required.
4. Minutes and formalities: decisions made during the meeting must be documented in minutes, which must be electronically signed to ensure their legal validity.

Virtual meetings bring numerous benefits to LLCs, including:

• Geographical flexibility: members can participate from any location, facilitating decision-making for companies with geographically dispersed members.
• Cost savings: expenses related to travel, venue hire and other logistical aspects of physical meetings are eliminated.
• Increased participation: removing geographical barriers encourages greater involvement of members in the company’s affairs.
• Technological modernisation: this model promotes the modernisation of LLCs by integrating digital solutions into their internal processes.

Despite their advantages, virtual meetings pose significant challenges for LLCs:

• Digital accessibility: it is essential to ensure that all members have the necessary technological resources to participate on equal terms.
• Cybersecurity: platforms must protect the confidentiality of information and the integrity of decisions made.
• Technical issues: problems such as connectivity failures or platform interruptions can disrupt the meeting and potentially affect the validity of resolutions.

The introduction of virtual meetings into LLC management represents a major step towards business digitalisation. This model addresses current needs for flexibility and efficiency while contributing to operational sustainability in a globalised environment.

For LLCs, virtual meetings are particularly useful for making key decisions, such as amending articles of association, increasing capital, or approving financial statements. They enable members to fully exercise their rights, regardless of their location, enhancing participation and control over the company.

With a legal framework supporting their implementation, LLCs have the opportunity to modernise their processes and adapt to the demands of the digital environment. Virtual meetings ensure the inclusion of all members and transparency in decision-making, positioning LLCs as forward-thinking enterprises prepared to meet future challenges efficiently and securely.