Founder vesting in Spain: good leaver and bad leaver clauses in a Spanish SL

Vesting is the arrangement under which a founder's stake in the company becomes fully earned over time while the founder stays with the business. Good leaver and bad leaver clauses decide what happens to that stake, and at what price, if the founder leaves early for a justified or an unjustified reason. No Spanish statute regulates vesting as such. In a Spanish limited company (sociedad limitada, SL) it is built from the shareholders' agreement, the articles of association and the rules on transfer of shares, and it should be settled before the first investor comes in.

What is founder vesting and why do investors require it?

In a newly formed company, much of the value depends on its founders. Vesting prevents a founder who leaves early from keeping the whole of a stake he or she no longer helps to build.

Spain almost always uses reverse vesting: the founder is a full shareholder from incorporation but undertakes to transfer the unvested portion if he or she leaves before a set date. Market practice commonly uses four years with a one-year cliff, a first year in which nothing vests. This is a negotiated convention, not a legal requirement.

The legal basis is freedom of contract. Article 1255 of the Spanish Civil Code allows any terms that are not contrary to law, morals or public policy, and article 28 of the Spanish Companies Act (Ley de Sociedades de Capital, LSC) allows the articles of association to include any terms that do not contravene the law or the defining principles of the company type.

How is vesting structured in a Spanish SL?

In the shareholders' agreement

The shareholders' agreement grants a call option to the other shareholders, or to the company, and imposes a matching obligation on the departing founder to sell, with the triggers, timing and price. It binds its signatories under article 1257 of the Civil Code, but article 29 LSC provides that agreements kept private among shareholders cannot be enforced against the company.

If the company itself buys back the shares, article 140.1(d) LSC requires shareholder approval and funding from profits or freely distributable reserves, and only covers shares of a member who has withdrawn or been expelled, shares acquired under a transfer restriction clause, or shares transferred on death. Outside the permitted cases, article 140.2 makes the acquisition void, and article 141.1 requires the shares to be cancelled or resold within three years.

In the articles of association

Article 188.3 of the Commercial Registry Regulation (Reglamento del Registro Mercantil) allows registration of clauses requiring a shareholder to transfer his or her shares to the other shareholders or to specified third parties when circumstances clearly and precisely stated in the articles occur. The founder's commitment to the business can also be framed as an ancillary obligation (prestación accesoria): article 86 LSC requires its specific content to be stated, article 89.1 requires the individual consent of those bound, and article 350 allows a member who wilfully fails to perform it to be expelled.

For start-ups, article 11.2 of Law 28/2022 of 21 December on start-ups makes their shareholders' agreements registrable if they contain no unlawful clauses, together with any clause in the articles imposing an ancillary obligation to subscribe to their terms, provided that future shareholders can also learn the content of the agreement. The Directorate General for Legal Certainty and Public Faith relied on that provision when it accepted, in its decision of 11 October 2024 (BOE-A-2024-23844), an ancillary obligation to comply with the terms of a family business protocol executed as a public deed.

What separates a good leaver from a bad leaver, and how is the price set?

In contractual practice, a good leaver is a founder who leaves for reasons not attributable to him or her, such as death, incapacity or removal without just cause. A bad leaver resigns before the agreed date or is removed for a serious breach, such as a breach of the non-compete. Typically, a good leaver transfers only the unvested portion at a price close to fair value, while a bad leaver receives a lower price, such as nominal or book value, and may also have to transfer part of the vested shares. None of these terms is a statutory rule.

Article 1256 of the Civil Code prevents the validity and performance of a contract from being left to the discretion of one party, so the classification of the departure must depend on objective facts rather than on the view of the buying shareholders. Where a price reduction penalises a breach, it resembles a penalty clause, which article 1152 of the Civil Code permits and which a court may reduce on equitable grounds under article 1154 if the main obligation was partly or irregularly performed.

What limits does the law place on transfer and price?

If vesting is written into the articles, article 108 LSC sets the limits: clauses making transfer practically free are void; a ban on transfer is valid only if members may withdraw at any time; and transfer or withdrawal may be blocked for no more than five years from incorporation or, for shares issued in a capital increase, from the deed executing it. Article 107.3 prohibits giving the company's auditor the task of setting the transfer value.

Article 175.2(b) of the Commercial Registry Regulation allows registration of a unanimous agreement on valuation criteria, including for the transfer obligation under article 188.3. In its decision of 17 May 2021 (BOE-A-2021-9316), the Directorate General accepted book value in the last approved balance sheet as a criterion, within the limits of the ban on leonine terms and on prejudice to third parties, and left room for judicial review where the value ties the member in excessively or abusively. It refused registration in that case because book value applied only when the shares were attached by creditors, to their detriment.

If the departure is handled as an expulsion, article 352.2 LSC generally requires a final court decision where the member holds 25% or more of the capital and does not agree, and article 353.1 provides that, absent agreement, an independent expert appointed by the commercial registrar values the shares.

Is vesting enforceable against the company and third parties?

Vesting set out only in the shareholders' agreement binds the signatories but cannot be enforced against the company or anyone who did not sign it. The Civil Chamber of the Spanish Supreme Court has qualified this rule where every shareholder signed: in judgment 674/2026 of 5 May (ECLI:ES:TS:2026:1980), it held that a signatory of such an agreement acted in bad faith, contrary to article 7 of the Civil Code, by challenging a resolution adopted to implement it. We analyse this case law in Shareholders' agreements before the Spanish Supreme Court.

That is why all shareholders should sign, and why the transfer obligation and the price should also appear in the articles, which bind later shareholders.

How does vesting interact with a capital increase?

Investors often ask founders to restart or extend their vesting schedule, or to apply it to shares they take up in the round. For the five-year limit in article 108.4 LSC, those shares count from the deed executing the increase, and the new shareholder must accede to the agreement so that every shareholder remains a party. The other founder decisions are covered in our guide to the founders' shareholders' agreement.

Frequently asked questions

Is vesting valid in Spain if no statute regulates it? Yes, as an exercise of freedom of contract and, if written into the articles, within the limits of article 108 LSC.

Can the bad leaver price be set at nominal value? In the shareholders' agreement freedom of contract applies, subject to the court's power to reduce penalties under article 1154 of the Civil Code. In the articles, the Directorate General has accepted criteria other than market value, such as book value, where all shareholders approve them and they apply generally; a fixed price at nominal value must be assessed case by case.

How RCM Legal helps with founder vesting and good leaver and bad leaver clauses

Vesting usually fails at two points when a dispute arises: ambiguous leaver definitions, which turn the good or bad leaver question into litigation, and clauses kept only in the shareholders' agreement, which cannot be enforced against the company or a third-party buyer.

At RCM Legal, our corporate lawyers in Murcia design founder vesting and align it with the shareholders' agreement, the articles of association and investor entry, for companies in the Region of Murcia and across Spain, through our Business 360 practice. Tell us about your case.