What a family protocol is
Royal Decree 171/2007 defines it as the set of agreements signed by shareholders among themselves or with relatives, affecting an unlisted company in which they have a common interest, aimed at a model of communication and consensus in decision-making that governs the relationships between family, ownership and business (article 2 of Royal Decree 171/2007).
Put simply: it is a document in which a business family decides, before there is a dispute, how it will take decisions, who may take part in the company and what happens to the shares when someone wants to leave, dies or retires. A family-owned company mixes three levels that do not always coincide: the family, the ownership and the management. The protocol is there so that each has its own rules.
What it usually contains
- The family’s values and goals for the business.
- Family governance bodies, such as a family assembly or family council, and how they relate to the general meeting and the management body.
- Rules for relatives joining the company: education, prior experience, pay.
- Share transfers: to whom shares can be sold or left, and with what pre-emption rights.
- A succession plan for both management and ownership.
- Dispute resolution between relatives.
- Foreseeable situations, such as the death, separation or divorce of a shareholder.
It is voluntary and can be made public
There is no obligation to have a protocol or to publish it (article 2.3). If the family wishes, the management body can publish it on the company’s website (article 4), ask the Commercial Register to record its existence (article 5) or include a copy with the annual accounts (article 6). The registrar does not examine its content. A company can publish only one protocol, although it may be publicised in several ways (article 2.2). Many families prefer to keep it private and to write into the articles of association only what is essential.
How to connect it with the articles, the shareholders’ agreement and wills
A protocol binds those who sign it, but not the company. Private agreements between shareholders cannot be enforced against the company (article 29 of the Spanish Companies Act, Ley de Sociedades de Capital). That is why the most important rules are usually also written into the articles of association, which are registered and bind the company. For example, a private limited company can restrict the transfer of shares: if the articles say nothing, a transfer to third parties requires the company’s consent (article 107), and the articles can prevent it for up to five years (article 108).
It is also worth coordinating the protocol with a shareholders’ agreement setting out each shareholder’s rights and obligations and with the shareholders’ wills, because they determine who ends up owning the shares when someone dies. That coordination must also involve your tax adviser.
Family protocol, shareholders’ agreement and articles: the difference
- The family protocol records the family’s agreements on how it relates to the business. It may include commitments of conduct and principles, and does not always take the form of a contract.
- The shareholders’ agreement is a contract between the shareholders on decisions, entries, exits and valuation. It is more technical and enforceable.
- The articles of association are the company’s rules: they are registered at the Commercial Register and bind the company and the shareholders.
The usual approach is to combine all three: the protocol sets the principles, the agreement develops them between the shareholders and the articles contain what must bind the company.
What to settle before the handover
- Who wants to continue and who does not. Talking frankly is the first step: a handover is prepared with the people who will carry on.
- How family, ownership and management are separated. Who owns, who runs the company and who is only a relative. Sometimes it is better for a non-family professional to take over management.
- Rules for relatives joining and leaving the company: requirements, pay and grounds for removal.
- How shares pass to the next generation: by inheritance, by gift or by sale, and at what valuation. It is worth agreeing in advance how the price is calculated, to avoid arguments.
- Balance between those who work in the company and those who do not, regarding salaries, dividends and rights.
- Who manages the company and with what powers after the handover, under the corporate governance rules.
- Wills and marital property regimes of the shareholders.
- Tax aspects of the handover, with your tax adviser.
- Realistic timescales. A handover is usually gradual: functions are passed on first and shares afterwards.
An example
A food distribution company founded by a couple in Álora has three children: two work in it and one does not. Before the founders retire, the family signs a protocol setting out how people join the company, how those who work in it are paid, how dividends are shared among all and how shares are valued if a child wants to sell. Restrictions on transfers are then written into the articles, a shareholders’ agreement is drafted and each shareholder reviews their will. That way the handover is carried out with written rules and not with each person’s memory of what was said.
Common mistakes
- Putting it off until there is a problem. A protocol signed when a dispute already exists is of little use.
- Not connecting it with the articles, so the rules do not bind the company.
- Copying a template that does not fit the family’s own situation.
- Imposing it without consensus. A protocol that someone signs reluctantly is not followed.
- Not reviewing it when circumstances change: grandchildren are born, a shareholder comes in, a group company is sold.
When to consult a lawyer
- If the company has several family branches with different interests.
- If some shareholders work in the company and others do not.
- If the family is considering a holding company or changes to the structure, such as a corporate restructuring. We explain this in our article on the family holding company.
- If some shareholders live outside Spain or have assets in different countries, with the particular points we explain on our foreign investment page.
- If the handover is imminent.
In our family business service we accompany business families through the whole process, from the initial contact to signing.
Author and sources
Author: Sara González Domínguez, a practising lawyer registered with the Málaga Bar Association (no. 8502). Sources checked on 6 October 2026.
- Royal Decree 171/2007 on the publicity of family protocols, consolidated text from the Spanish Official State Gazette (BOE).
- Spanish Companies Act (Ley de Sociedades de Capital), consolidated text from the BOE.