Commentary on the Resolution of November 29, 2024 of the General Directorate of Legal Security and Public Faith (DGSJFP).

A. Introductory Exordium.

Harmonizing the legitimate interest in keeping certain covenants or agreements reserved in the family protocol, their reflection in the articles of association and their access to the Commercial Registry can present difficulties of adjustment due, precisely, to the vocation of giving publicity that animates the Registry and the aspiration of reserve that underlies the great majority of family protocols.

To this we must add the markedly regulatory tendency shown by some registries, in an exacerbation of registration as a requirement for validity which, in our opinion, is not in keeping with the nature of a registry of persons, not of assets, which these registries have.

Let us start from the non-existence in our legal system of a specific precept or rule that formally defines what a “family protocol” is, a concept coined in practice and by the doctrine, understood as an instrument of self-regulation for business families that seek to establish rules and agreements that regulate the relations between the family company, its members and among them. Precisely for this reason, the family protocol is a document that incorporates a plurality of issues, with marked heterogeneity, due to the plurality of situations that it usually regulates.

In the absence of this specific regulation, when analyzing the framework of validity of the family protocols, the precepts of the Civil Code that regulate the basic principles of contract law and, specifically, Article 1,255, which enshrines the principle of party autonomy, or Article 28 of the Consolidated Text of the Capital Companies Act (TRLSC) on the principle of free statutory autonomy, are used.

In this analysis, it is necessary to mention Royal Decree 171/2007, of February 9, 2007, which regulates the publicity of family protocols. Although the purpose of this regulation is to “[…] establish the conditions, form and requirements for the publicity of family protocols, as well as, where appropriate, access to the commercial registry of public deeds containing clauses subject to registration”, it incorporates some considerations that must be borne in mind.

Firstly, and as a well-known fact, it recognizes that “A large part of the Spanish business fabric is made up of family companies in a broad sense, that is to say, those in which the ownership or decision-making power belongs, totally or partially, to a group of people who are blood relatives or related to each other”, a reality that makes it necessary to remove obstacles and provide the legal operator with instruments to provide the family business with an adequate legal framework.

And although it does not include in its articles the definition of family protocol, it does so in the explanatory memorandum when it states: “It can be understood as such [family protocol] that set of pacts subscribed by the partners among themselves or with third parties with whom they have family ties with respect to a non-listed company in which they have a common interest in order to achieve a model of communication and consensus in the decision making to regulate the relations between family, property and company that affect the entity”.

We have made this foreword as it is appropriate for the analysis of the Resolution of November 29, 2024 of the General Directorate of Legal Security and Public Faith (DGSJFP) (BOE of December 25, 2024) that accompanies it.

B. Background.

In this case, the registration in the Commercial Registry of Seville of a bylaw clause introduced by the NOSL company, by means of which the obligation to comply with and observe the provisions of a family protocol is established as an ancillary obligation. This protocol was executed in public deed and referenced in the bylaws, but it has not been deposited or registered in the Mercantile Registry.

The wording of this article is as follows:

“Article 6.bis: Ancillary contribution.

All the partners, natural persons personally or legal entities, through their natural person representative, are subject to the unpaid ancillary obligation consisting of the compliance and observance of the provisions agreed by the partners in the Family Protocol recorded in the public deed authorized on February 1, 2024, before the Notary Public of Seville, Mr. […], under number […] of his protocol”.

The mercantile registrar refused the registration arguing that the content of the accessory benefit was not sufficiently determined in the bylaws themselves and that the family protocol, not being public, did not guarantee adequate publicity for third parties,

particularly for future partners who could acquire shares in the company.

The company filed an appeal before the General Directorate of Legal Security and Public Faith (DGSJFP), pointing out that the accessory benefit is perfectly identified through its formalization in a public deed, thus complying with the legal requirements. Furthermore, it argued that the lack of publicity of the protocol did not contravene the applicable regulations, since the reference to the deed in the bylaws ensures the knowledge of the obligations by current and future partners.

What was submitted to the resolution of the DGSJFP was whether the bylaws clause complies with the legal requirements of determinability and publicity necessary for its registration, and whether the refusal of the registrar was appropriate.

C. The doctrine contained in the Resolution of November 29, 2024 of the General Directorate of Legal Security and Public Faith (DGSJFP).

At the beginning of the Fundamentos de Derecho, and as has become customary, the Resolution cites the rules, sentences and judicial resolutions that it takes into consideration to decide, such as the Resolutions of March 24, 2010, June 5, 2015 and June 26, 2018, among others. These resolutions recognize the possibility of including covenants as accessory benefits as long as they are formalized in a public deed and are determinable. In particular, the Resolution of June 26, 2018 highlights that the determinability of the benefit can be guaranteed by reference to identifiable documents that provide legal certainty to current and future partners. It also cites the recent Resolution of October 11, 2024, the wording of which is very similar to that of the aforementioned Resolution.

Analyzing the legal grounds, we consider it appropriate to focus on three specific aspects, namely;

Determinability of the benefit The DGSJFP confirms that the ancillary benefit consisting of compliance with a family protocol is valid if it is identified in a public deed whose reference is included in the articles of association. This is based on Article 86 of the Capital Companies Act (LSC) and Article 1273 of the Civil Code, which allow determinable obligations if they are based on clear and verifiable criteria.

The registrar’s argument, according to which the performance would not be cognizable for future partners, is rejected. The DGSJFP considers that the reference to the protocol in a public deed meets the requirements of clarity and legal certainty, allowing both current and future partners to know the obligations of the company.

current and future partners to know the obligations arising from having access to that public deed.

1. Publicity of the protocol The argument of the registrar that the lack of deposit of the protocol in the Commercial Registry prevents its knowledge by third parties, affecting transparency and the informed decision to acquire shares, is rejected by the DGSJFP by pointing out that the regulations do not require the deposit of the complete content of the family protocols, provided that the publicity options provided for in Royal Decree 171/2007 are complied with, reiterating that the existence of a protocol can be known through the identification of the public deed in the bylaws and the possibility of accrediting before the notary a legitimate interest to access its contents.
2. Autonomy of the will and limits. The resolution upholds the registration as it does not find that the clause exceeds the limits of the autonomy of the will, nor contradicts the principles of the commercial companies. On the contrary, it is considered that the clause respects the corporate regulations, by providing mechanisms that ensure its application without emptying the registry of its content.

D. Conclusions.

The Resolution analyzed which, as has been said, upholds the appeal and revokes the challenged qualification, facilitates the compatibility of the family protocols with the corporate bylaws, without the need to incorporate in the latter the pacts or agreements reached in the family protocol, in a sort of “per relationem” reference, referring the scope of the accessory performance to a title, the family protocol, which has not had access to the Mercantile Registry but which is fully identified; It is understood that the full deposit of the family protocol in the Mercantile Register is not obligatory, since the statutory reference to a fully identified public deed allows to comply with the requirements of publicity and to guarantee the knowledge of the obligations.

A doctrine that reinforces the compatibility between family protocols and corporate law is welcome, as long as the principles of determinability and publicity are respected.

Possibly the scarce access of the family protocols in the Mercantile Registry is due to excessive demands on its registry publicity when the families, for different reasons, try to keep a relevant part of the family protocol reserved, since it not only regulates aspects that can affect the social life but also other particularities that they wish to keep reserved.

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