There is a moment in almost every sale of a family business that feels a lot like opening a drawer that has been shut for years.<\/strong> The letter of intent is signed, the price is on the table and the buyer has sent in its due diligence team. And then someone, usually a young lawyer running on too much coffee, finds a sentence on page 34 of a 2019 credit facility: “The Bank may declare this facility due and payable in the event of any change in the shareholding structure of the Borrower”.<\/p>\n Nobody negotiated it with a sale in mind. Nobody remembers it. But there it is, and from that moment a bank that until yesterday was just another supplier becomes a party to the transaction, with the power to say no.<\/p>\n That is a change of control clause, and that is what we call the silent impact of M&A: a risk that sits neither in the bylaws, nor on the balance sheet, nor in the shareholders’ agreement, but scattered across the contracts the company has with third parties.<\/strong> Banks, major customers, landlords, licensors, the public administration. Each one holding a key. And each key, if it has not been anticipated, is paid for in price, in timing, or in both.<\/p>\n This article explains what these clauses are, where they hide, how Spanish law treats them, what buyers (and private equity funds) do with them and, above all, what you as an owner or executive can do so that they do not cost you a quarter of the price. We have written it for the business owner who is two or three years away from a decision about a sale, a succession or bringing in a partner. In other words, at the point where something can still be done.<\/p>\n A change of control clause is a provision under which one party acquires certain rights if the other party comes to be controlled by persons other than those who controlled it when the contract was signed.<\/strong> It does not regulate the sale of the company. It regulates what happens in that contract<\/em> when the company is sold.<\/p>\n Its rationale is old and rather human: the contract was entered into intuitu personae<\/em>, in consideration of who the other party was. The bank lent on the strength of the family behind the business; the customer approved the supplier because of its owner and its team; the licensor handed over its technology to someone who was not a competitor. If the person in control changes, the premise on which consent was given breaks down. The clause is the way of reserving the right to think again.<\/p>\n Change of control clause.<\/strong> It is triggered when control of a party changes, even though the company that signed remains exactly the same. It is the one that “bites” when shares are sold.<\/p>\n Anti-assignment clause.<\/strong> It prevents a party from transferring its contractual position to someone else without consent. In Spain it does not even need to be agreed: the assignment of a contract with outstanding obligations requires, by itself, the consent of the other contracting party, as the Supreme Court has repeatedly held (judgments 287\/2014 of 22 May and 532\/2014 of 13 October, which speak of a “conjunction of three contractual wills”). It is the relevant clause when what is being sold is assets, not shares. If you are weighing one structure against the other, we cover it at length in asset deal vs. share deal<\/a>.<\/p>\n Key person clause.<\/strong> It ties the contract to specific individuals remaining in charge: the founder, the technical director, the winemaker. It can be triggered without a single shareholder changing, for instance when the founder steps back after the sale. It is one of the reasons we insist so much on the role of the management team in a sale process<\/a>.<\/p>\n When shares are sold, the company does not change. It remains the same legal person, with the same contracts, the same assets and the same debts. So, absent an express provision, the counterparty has no right to terminate or to be asked for permission.<\/strong> Freedom of contract (article 1255 of the Spanish Civil Code) allows the parties to agree otherwise, but it has to be agreed. And the courts do not presume it.<\/p>\n The Pontevedra Court of Appeal made this very clear in its judgment 9\/2025 of 10 January. A supplier argued that the sale of 100% of its customer’s shares amounted to an “assignment or transfer of the business” requiring its approval. The court rejected the argument: the sale did not alter the legal personality of the company, the transaction was res inter alios<\/em> for the supplier, which “as a third party has nothing to consent to”, and no interpretative technique allowed a generic assignment clause to be read as a termination clause for change of control.<\/p>\n The lesson cuts both ways. For anyone wanting protection against a change of shareholder: it must be agreed expressly. For anyone selling: what you should be looking for in the contracts are express clauses, not ghosts.<\/strong><\/p>\n This is where almost everything is decided. If the contract does not define control, the default reference in Spain is article 42 of the Commercial Code: a majority of voting rights, the power to appoint or remove a majority of the board, or a majority of votes by virtue of agreements with third parties. But private contracts rarely settle for that. The contractual definition may include:<\/p>\n Thresholds vary too: 50%, 30%, “decisive influence”, a majority of the board. A 30% control definition can be triggered by the arrival of a minority financial investor, something many families do not anticipate when they open up their capital to grow.<\/strong><\/p>\n What the counterparty can do once change of control is triggered ranges from almost nothing to almost everything. We like to group the clauses into four families and, for due diligence purposes, paint them in three colours.<\/p>\nWhat a change of control clause really is<\/h2>\n
Three provisions that should not be confused<\/h3>\n
The starting point: sell the shares and the contract carries on<\/h3>\n
And the delicate point: what “control” means<\/h3>\n
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Four families of clauses and a traffic light<\/h2>\n