Documentation obligations

Article 18.1 of the LIS requires that transactions carried out between related persons or entities be valued at market value.

Market value shall be understood as that which would have been agreed upon by independent persons or entities under conditions that respect the principle of free competition.

Article 18.2 of the LIS establishes that the following will be considered related persons or entities :

An entity and its partners or shareholders.
An entity and its directors or administrators, except with regard to remuneration for the performance of their functions.
An entity and the spouses or persons related by kinship, in a direct or collateral line, by consanguinity or affinity up to the third degree of the partners or participants, directors or administrators.
Two entities that belong to a group.
An entity and the directors or managers of another entity, when both entities belong to a group.
An entity and another entity in which the first entity has an indirect interest of at least 25 percent of the share capital or equity.
Two entities in which the same partners, shareholders or their spouses, or persons related by family ties, in a direct or collateral line, by consanguinity or affinity up to the third degree, participate, directly or indirectly, in at least 25 percent of the share capital or equity.
An entity resident in Spanish territory and its permanent establishments abroad.

In cases where the link is defined based on the relationship of the partners or participants with the entity, the participation must be equal to or greater than 25 percent. The reference to administrators will include those de jure and those de facto.

Group exists when an entity holds or may hold control over another entity or entities according to the criteria established in article 42 of the Commercial Code, regardless of its residence and the obligation to prepare consolidated annual accounts.