Why are bylaws important?

Business start-up in Spain, Legal in Spain Leave a comment   Published on par Jonatan Carbonell

When incorporating a company, it is important to define the bylaws of the company to understand aspects such as the form of administration or the types of agreement to be dealt with. So, if you are about to start this process, here is the information you need to know.

What are the bylaws?

To refer to the bylaws is to understand the meaning of the series of rules that are established at the time of creating a company to define its internal operation.

In this sense, the rights and obligations of the partners and/or shareholders are defined, as well as the regulations that allow the activities to be carried out in an optimal and efficient manner.


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What is the purpose of the bylaws?

Now then, in addition to recording how the company is going to operate, the articles of incorporation are responsible for identifying essential data, so, for its creation, you must establish the following:

  • Names of partners

  • Company name: what is the name of the company?

  • Corporate purpose: what are the activities in which the company engages?

  • Registered office: what is the postal address where the company is registered?

  • Amount of capital stock: how is the partnership interest established? What is its value and distribution among the partners?

  • The dividend: how will profits be distributed?

  • Reserves: how will the reserve fund be established within the company?

  • Rules for the organization of the company: for example, who will have the role of president?

  • Decision-making rules: Will decisions be made by vote, simple majority or absolute majority?

  • Date: when will the business start?

  • Liquidation: what are the conditions for the liquidation of the company?


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Amendment of bylaws

In some occasions, after a certain period of time has elapsed, it is possible that the company may need to make a modification in its bylaws, and in order to carry out this change you must follow the following steps:

1. Create and submit a document with the modification.

The partners must write an explanatory text in which they indicate the modification to be made; it can be a change in the domicile, capital, among others.

2. To convene the General Meeting

After that, the administrator appointed in the company must call a General Meeting, as previously established in the bylaws, and expose the new aspects to be varied, allowing the right to the partners to review the full text in question.

3. The day of the meeting

The members shall then meet according to the date and time specified in the notice.

At this point, basically, a vote is taken to decide whether or not to amend the bylaws (the number of votes required is defined as previously established by each company) and a certification is issued specifying the decision taken.

4. Delivery before the notary

Now that it has been decided and the rights of each of the partners have been respected, the public deed of modification of the corporate bylaws must be delivered, as well as the certification previously made.

5. Registration in the Mercantile Registry

Finally, you must file the public deed and register it at the Mercantile Registry, so that the document can be sent and officially registered in the Official Gazette of the Mercantile Registry (BORME).

The bylaws apply to limited liability companies as well as to other types of entities such as associations, community property associations, civil societies, among others, since they are considered a fundamental tool to avoid possible conflicts between partners.

Likewise, defining this document is a key point for the business to operate properly, being validated by a legal document that includes both the established business model and the company’s vision.


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Keeping order in legal matters may seem complicated in the business world, however, with the necessary support you can live with the peace of mind that your business will not present problems in the future. Therefore, in TAS Consulting we advise you to create your bylaws and any other documentation you need.


Published on par Jonatan Carbonell

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