In a private limited company (S.L.), trust among shareholders is everything—especially in the early stages. That’s why many founders ask whether they can shield the company from third parties by restricting or prohibiting the transfer of quotas (participations).
The answer: yes, but with important nuances.
The Starting Point: Article 107 of the Spanish Companies Act (LSC)
The Spanish Companies Act establishes that the transfer of quotas is free in three cases:
Outside these cases, transfers are subject to the provisions set out in the company’s bylaws. If the bylaws are silent, the statutory rules apply, which include a pre-emptive acquisition right in favor of the remaining shareholders and the company.
In practice, if a shareholder wishes to sell to an unrelated third party, they must first notify the directors, identifying the quotas, the buyer, and the terms of the transaction. The general meeting must approve the transfer. The other shareholders may then exercise their pre-emptive right by paying the agreed price.
Can the Sale Be Directly Prohibited?
The law does not allow an absolute and indefinite prohibition. However, it does allow two specific mechanisms:
| Type of Prohibition | Duration | Requirements | In Force in 2026 |
|---|---|---|---|
| Temporary | Up to 5 years from incorporation (or from a capital increase, if the quotas arise from it) | Total prohibition of inter vivos transfers | Yes |
| Permanent | Indefinite, but excludes inheritances and compulsory transfers (e.g., attachments) | Mandatory recognition of the shareholder’s right to withdraw at any time + valuation formula for quotas | Yes |
A permanent prohibition has a logical counterpart: if you prevent someone from selling, you must provide an exit mechanism. That mechanism is the right of withdrawal, with the company obliged to purchase the quotas at a price determined in advance in the bylaws.
If It Is Not in the Bylaws, Can It Be Added Later?
Yes, but it requires unanimous approval of all shareholders.
If a good-faith third party acquires quotas before the amendment is registered with the Commercial Registry, the sale will be valid. The company may claim against the shareholder who breached the agreement, but the third party will already have become a shareholder.
Transfers by Inheritance
When quotas are transferred by succession, the heir or legatee automatically acquires shareholder status. Although the bylaws may provide for a pre-emptive acquisition right in favor of the company, they cannot prevent the heir from becoming a shareholder
Restricting the entry of third parties into an S.L. is possible, but only within the limits set by law. The key lies in drafting bylaws that reflect what the founding shareholders want to achieve. If the goal is a temporary lock-up while the project gets off the ground, the five-year prohibition may suffice. If the intention is more structural, a permanent prohibition combined with a withdrawal right may be more appropriate.
Improvisation is not an option. Before incorporating the company or amending the bylaws, it is advisable to analyze the specific case carefully and ensure that the chosen structure complies with the law and protects the interests of all shareholders. If you would like us to assess your situation together, feel free tocontact us
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