Partner disputes are one of the most common reasons Spanish companies end up being sold. This guide explains the legal mechanisms available, what practical solutions actually work, and when selling the business is the right way to resolve the deadlock.
Shareholder conflicts are, alongside founder retirement, the single most common reason Spanish family businesses and SMEs end up being sold. And yet they are also the situation most often postponed, most actively ignored, and that accumulates the most damage while it goes unresolved.
If you are in a dispute with your business partner — or if you are the partner who wants to exit and cannot find the door — this guide explains what options you have: the legal ones, the practical ones, and the ones that actually work in businesses with €3M to €50M in revenue.
Shareholder conflict rarely emerges suddenly. There is almost always an accumulation of factors that were tolerated for years without being resolved.
Diverging vision. One partner wants aggressive growth, the other prefers caution. One wants to diversify, the other to focus. One wants to reinvest, the other to distribute dividends. When the company was small and the decisions were modest, the disagreement was manageable. When decisions involve millions of euros, strategic misalignment becomes paralysing.
Contribution imbalance. One partner works twelve-hour days; the other appears two days a week and earns the same. For years this is tolerated — “we’ve been together from the start” or “I owe them a lot.” But the resentment accumulates, and eventually the partner carrying the weight no longer wants to continue.
Personal problems transferred to the business. A family dispute, a disagreement over the estate of a deceased partner, a generational conflict. The company pays the price for conflicts that have nothing to do with it.
Minority oppression. The majority shareholder uses their position to take decisions that hurt the minority: refusing to distribute dividends, raising salaries for allied executives, excluding the minority from information. The minority shareholder feels trapped — they cannot exit easily, and from inside they cannot change anything.
The Spanish Companies Act provides for a right of separation: a shareholder who disagrees with certain corporate decisions can demand that the company buy back their shares at “fair value.”
The circumstances that trigger this right are defined by statute: change of corporate purpose, extension of the company’s term, reactivation after dissolution, creation of new shares with special rights, or failure to distribute dividends for five years in companies that have generated consistent profits.
The practical problem is the valuation. “Fair value” is a concept that generates expert reports, disputes and litigation. The process can take one to two years. During that time, the company remains blocked.
The other mechanism is the forced exclusion of a shareholder who has breached their obligations or caused serious harm to the company. In practice it is rarely used because it requires a meeting resolution and is easily challenged in court.
If a good shareholders’ agreement was signed when the company was formed, there may already be negotiated exit mechanisms: call options, rights of first refusal, drag-along clauses (which allow the majority to compel the minority to sell when a buyer is found at agreed terms) or tag-along rights (which give the minority the right to join a sale by the majority).
If that agreement exists, the solution is much simpler. If it does not — as is the case in most Spanish SMEs — everything has to be negotiated from scratch.
The partner who wants to exit sells their shares to the one who wants to stay, or vice versa. This is the cleanest solution when it works, because the business remains in the hands of someone who knows it and wants it.
The typical obstacle: the remaining partner does not have sufficient liquidity to pay the real value of the shares. The purchase can be structured with deferred payments, but that maintains an economic relationship between the parties for years. Bank financing is also possible, although banks are often reluctant to lend against shareholdings in SMEs without hard assets as security.
In some cases the conflict is not irreconcilable and what is missing is a facilitated process to define roles, responsibilities and compensation more clearly. A good external mediator can help restructure the shareholder relationship before it becomes irreparable.
This option is worth exploring when both partners have a long shared history and both recognise that the conflict can be resolved through negotiation. It is not the right path when one of them has already decided to leave and is only looking for the best exit terms.
This is the least obvious option but, in many cases, the most efficient: an external investor acquires the entire company — or a controlling stake — settling the positions of both shareholders and resolving the deadlock in a single transaction.
The advantages are significant: the price that shareholders receive is a real market price, generally higher than what one partner would pay the other in a distressed direct sale; the transaction completes within a defined timeframe; and neither party has to continue managing a relationship that is not working.
The obvious drawback: both shareholders exit the ownership of the business. But when the alternative is a five-year litigation during which the company’s value erodes quietly, a sale is often the most rational financial decision.
Similar to the above, but without a single specific investor. Both shareholders agree to take the company to market via a structured M&A process, engage an M&A adviser, and divide the proceeds according to their respective shareholdings.
This requires cooperation between shareholders in conflict, which is not always possible. But when both parties acknowledge that the company is worth more sold than deadlocked, the process can complete in four to six months.
| Situation | Recommended approach |
|---|---|
| One wants out, the other has liquidity | Direct share purchase |
| Management conflict, no exit desire | Mediation and role restructuring |
| Neither can buy the other out | External investor or full sale |
| Both want liquidity | Open market sale |
| Advanced litigation or total deadlock | External investor (single-transaction resolution) |
One thing that is rarely quantified is the cost of not resolving the conflict.
Every month a company operates with two shareholders who will not speak to each other, who block each other on important decisions, or who use the business as a battleground, that month has a cost. The best employees sense the instability and leave. Clients notice the paralysis in decision-making. Necessary investments are not made. The external manager who could professionalise the business cannot be hired because the shareholders cannot agree.
In our experience, companies that spend two or more years in intense shareholder conflict typically lose between 15% and 30% of their value during that period. That is significantly more than either party would have conceded in a direct negotiation at the outset.
At Blue Mountain, we regularly acquire companies that are in shareholder conflict. We do so because we understand that certainty and speed have a value that goes beyond the headline price.
We can acquire 100% of the company — settling the positions of both shareholders — or the stake of one of them if the other wants to continue as a partner under new ownership. We structure transactions to be compatible with the shareholder separation process, work directly with both parties’ legal advisers, and can close in three to four months when there is fundamental agreement.
If you are in a shareholder dispute and want to explore options, you can reach us at /en/contact/. The conversation is confidential and without obligation.
It may also be useful to read our perspective on generational transition in family businesses to understand the broader context of the acquisitions we make.
By Blue Mountain Capital
By Blue Mountain Capital
By Blue Mountain Capital
If you wish to explore a potential collaboration or present an investment opportunity, we invite you to contact us. We guarantee absolute confidentiality in all our conversations.