Shareholders are equity owners but does not represent the company
A shareholder, is one of the owners of the company. The main right of a shareholder is to receive dividends. In other words, if the company makes money, then the shareholder gets a share of the money. The Spanish Company Law, states that shareholders do not have any management rights in the company. A shareholder (even a majority shareholder) may not perform any business on behalf of the company. For example, a shareholder cannot use the company’s money or sign contracts on behalf of the company.
Directors are the legal representative and administrator of the company
A director is the legal representative who has the right to manage the company (Administrador in Spanish), according to the law. The legal representative’s signature or authorization is required to access the company’s funds and to sign contracts for the company.
Note :The legal representative may authorize another person to represent the company, i.e., an authorized person. There are two types of authorized persons: the first is a special authorized person, who authorizes a person to do a specific thing on behalf of the company (for example, to sign a contract), and the second is a general authorized person, who can do something more extensive on behalf of the company (for example, authorizing the company’s treasurer to call the company’s funds).
The legal representative can be one person or more than one person:
1. Single legal representative. That is, one person is the sole representative of the company.
2. Joint legal representative: The company can appoint several legal representatives to jointly represent the company. That is, several people can join together in order to represent the company. For example, to sign a contract on behalf of the company, the signatures of all legal representatives are required. In this way, one person can be restricted from having full authority to handle the company’s business.
3. Joint and several legal representatives: by several legal representatives, they can each represent the company. For example, any one of them can use the company’s funds.
4. Board of Directors: this body, usually encountered only in large companies, is the one that represents the company not by one or more representatives, but by a group body. The decisions of the Board of Directors are made by voting. The Board of Directors can appoint the Chairman of the Board as well as the Secretary General.
