1. Which law is applicable to the legal capacity and right of representation of a legal entity?
Read answer
The main rules are located in the Spanish Civil Code (Código Civil) and in the Spanish Law on Companies (“Ley de Sociedades de Capital”)
Article 9.11 of the Spanish Civil Code states: "The personal law corresponding to legal persons is determined by their nationality and will govern everything related to capacity, incorporation, representation, operation, conversion, dissolution and extinction".
Article 28 of Spanish Civil Code adds: "Corporations, foundations and associations, recognized by law and domiciled (having a seat) in Spain, shall enjoy Spanish nationality, provided they have the concept of legal persons in accordance with the provisions of this Code."
"Associations domiciled abroad will have in Spain the consideration and rights determined by treaties or special laws."
Art. 8 of the Spanish Law on Companies (Ley de sociedades de Capital) states: “Nationality: All capital companies (private capital companies) that have their domicile in Spanish territory, whatever the place in which they had been incorporated” and Art. 9 “Address. Actual seat. 1. The capital companies shall establish their actual seat within the Spanish territory in the place where the centre of their effective administration and seat is located, or where their principal establishment or operation is located. 2. Capital companies whose main establishment or operation is located within the Spanish territory must have their seat in Spain ”.
Therefore, the place (Spain or other) in which the Company is incorporated does not matter for these purposes. What really matters is the Legal System according to which it is constituted.
So a company whose address is located within the Spanish territory, in the place where the centre of its effective administration and management is located, or where its main establishment or operation is located, is regarded as Spanish.
The determining fact: the incorporation of the Company in accordance with Spanish Law and in compliance with the Spanish rules, the company then MUST have its domicile in Spain.
Art. 9.2 would operate as a brake against fictitious companies, especially non-EU companies. There would be a potential Spanish nationality: constitution under Spanish law that would become effective Spanish nationality with the establishment of the domicile in Spain.
So, companies located in Spain, even though incorporated in another country, are reputed as Spanish, and so the legal capacity and right of representation are regulated by Spanish legislation.
Usually it is the directors who have the general right of company representation.
Hide answer
Article 9.11 of the Spanish Civil Code states: "The personal law corresponding to legal persons is determined by their nationality and will govern everything related to capacity, incorporation, representation, operation, conversion, dissolution and extinction".
Article 28 of Spanish Civil Code adds: "Corporations, foundations and associations, recognized by law and domiciled (having a seat) in Spain, shall enjoy Spanish nationality, provided they have the concept of legal persons in accordance with the provisions of this Code."
"Associations domiciled abroad will have in Spain the consideration and rights determined by treaties or special laws."
Art. 8 of the Spanish Law on Companies (Ley de sociedades de Capital) states: “Nationality: All capital companies (private capital companies) that have their domicile in Spanish territory, whatever the place in which they had been incorporated” and Art. 9 “Address. Actual seat. 1. The capital companies shall establish their actual seat within the Spanish territory in the place where the centre of their effective administration and seat is located, or where their principal establishment or operation is located. 2. Capital companies whose main establishment or operation is located within the Spanish territory must have their seat in Spain ”.
Therefore, the place (Spain or other) in which the Company is incorporated does not matter for these purposes. What really matters is the Legal System according to which it is constituted.
So a company whose address is located within the Spanish territory, in the place where the centre of its effective administration and management is located, or where its main establishment or operation is located, is regarded as Spanish.
The determining fact: the incorporation of the Company in accordance with Spanish Law and in compliance with the Spanish rules, the company then MUST have its domicile in Spain.
Art. 9.2 would operate as a brake against fictitious companies, especially non-EU companies. There would be a potential Spanish nationality: constitution under Spanish law that would become effective Spanish nationality with the establishment of the domicile in Spain.
So, companies located in Spain, even though incorporated in another country, are reputed as Spanish, and so the legal capacity and right of representation are regulated by Spanish legislation.
Usually it is the directors who have the general right of company representation.
Hide answer
2. What criteria/rules are used to determine the applicable law (for example the law of incorporation or the actual seat)?
Read answer
See question 1. The criteria is the actual seat. A company, regardless of the place of incorporation, will be regarded as Spanish (and so Spanish law will apply) if the actual seat is located in Spain.
A company incorporated abroad and whose seat is located abroad will be considered as foreign.
Hide answer
A company incorporated abroad and whose seat is located abroad will be considered as foreign.
Hide answer
3. Which international conventions have to be respected?
Read answer
The main international conventions which have to be respected are all EU conventions.
Another important fact to be taken into consideration is the interpretation given by the Court of Justice of the European Union (CJEU) about freedom of establishment in the CENTROS case.
Hide answer
Another important fact to be taken into consideration is the interpretation given by the Court of Justice of the European Union (CJEU) about freedom of establishment in the CENTROS case.
Hide answer
4. Are there international conventions with regard to certain countries?
Read answer
Yes, they can be consulted here:
http://www.exteriores.gob.es/Portal/es/PoliticaExteriorCooperacion/Tratados/TratadosEstados/Paginas/default.aspx
There is a link on this webpage to all international bilateral conventions between Spain and other countries. A pdf guide will open.
Below you can find the direct link to all conventions, listed by country in alphabetical order. Each country lists the different conventions and their subject.
http://www.exteriores.gob.es/Portal/es/SalaDePrensa/Multimedia/Publicaciones/Documents/GUIA%20TRATADOS%20CON%20PAISES.PDF
Hide answer
http://www.exteriores.gob.es/Portal/es/PoliticaExteriorCooperacion/Tratados/TratadosEstados/Paginas/default.aspx
There is a link on this webpage to all international bilateral conventions between Spain and other countries. A pdf guide will open.
Below you can find the direct link to all conventions, listed by country in alphabetical order. Each country lists the different conventions and their subject.
http://www.exteriores.gob.es/Portal/es/SalaDePrensa/Multimedia/Publicaciones/Documents/GUIA%20TRATADOS%20CON%20PAISES.PDF
Hide answer
5. Are all companies registered in a public register? What are the effects of registration? (please add a link to the register, if possible)
Read answer
Yes, all companies must be registered in the Business Register.
According to Art. 32 of the Spanish Law on Companies (Ley de sociedades de Capital), registration of Capital Companies in the Business Register is a legal duty, with a deadline of 2 months from the incorporation of the company, otherwise, the founding persons and directors will be jointly and severally liable for the damages caused by the breach of this obligation.
If not registered, the company is deemed as an “irregular company” and members and directors may have to engage their personal wealth to respond of the company’s liabilities, as the rules of the civil companies or collective companies may apply (art. 39 Law on Companies)
The Spanish Business Register is public (anyone can consult it and obtain in real time extracts, certificates, copies of acts and financial statements concerning the registered companies, as well as the composition of the Board of Directors and who has the right to represent the company)
Civil companies are not registered in this register. Link to Business Register: http://www.registradores.org
The Business Register is established in all provincial capitals and the competence of each Registry extends to the territory of the corresponding province. In addition, there are Business Registers in Ceuta, Melilla, Ibiza, Mahón, Santiago de Compostela, Puerto de Arrecife, Puerto del Rosario, Santa Cruz de la Palma, San Sebastián de la Gomera and Valverde, all them with their corresponding territorial competence.
The address of each of the provincial Business Registers can be located through the interactive map available on the Registrars website: http://www.registradores.org/mapa_interactivo.jsp
Hide answer
According to Art. 32 of the Spanish Law on Companies (Ley de sociedades de Capital), registration of Capital Companies in the Business Register is a legal duty, with a deadline of 2 months from the incorporation of the company, otherwise, the founding persons and directors will be jointly and severally liable for the damages caused by the breach of this obligation.
If not registered, the company is deemed as an “irregular company” and members and directors may have to engage their personal wealth to respond of the company’s liabilities, as the rules of the civil companies or collective companies may apply (art. 39 Law on Companies)
The Spanish Business Register is public (anyone can consult it and obtain in real time extracts, certificates, copies of acts and financial statements concerning the registered companies, as well as the composition of the Board of Directors and who has the right to represent the company)
Civil companies are not registered in this register. Link to Business Register: http://www.registradores.org
The Business Register is established in all provincial capitals and the competence of each Registry extends to the territory of the corresponding province. In addition, there are Business Registers in Ceuta, Melilla, Ibiza, Mahón, Santiago de Compostela, Puerto de Arrecife, Puerto del Rosario, Santa Cruz de la Palma, San Sebastián de la Gomera and Valverde, all them with their corresponding territorial competence.
The address of each of the provincial Business Registers can be located through the interactive map available on the Registrars website: http://www.registradores.org/mapa_interactivo.jsp
Hide answer
6. Does a foreign company have to be registered in your public company register?
Read answer
Yes, companies incorporated abroad and establishing in Spanish territory one or more secondary seats with permanent representation, have to be registered in the public company register corresponding to the province in which their seat is located.
Hide answer
Hide answer
7. Who has the legal right of representation of a legal entity?
Read answer
Generally the legal right of representation of a legal entity belongs to the directors, but can also correspond to other persons by power of attorney also granted by the directors.
The general rules for limited companies are the following (Spanish Law on Companies (Ley de sociedades de capital)):
SPA (public limited companies) and SRL (limited companies)
The power of representation given to the directors by the articles of association or by the decision of nomination is a “general power of attorney” The general power of attorney has to be registered in the Business Register.
Directors have the general representation of the company. Limitations to the directors’ power of representation resulting from the act of incorporation or nomination, even if registered, are not enforceable against third parties.
Hide answer
The general rules for limited companies are the following (Spanish Law on Companies (Ley de sociedades de capital)):
SPA (public limited companies) and SRL (limited companies)
The power of representation given to the directors by the articles of association or by the decision of nomination is a “general power of attorney” The general power of attorney has to be registered in the Business Register.
Directors have the general representation of the company. Limitations to the directors’ power of representation resulting from the act of incorporation or nomination, even if registered, are not enforceable against third parties.
Hide answer
8. Must the right of representation be registered (if yes, please add a link to the register, if possible)?
Read answer
http://www.registradores.org
Yes. Registration requirements can vary according to the company structure. The Spanish Law on Companies (Ley de sociedades de capital) contains provisions concerning the nomination of the director and sets out who has representative power and their limitations.
Hide answer
Yes. Registration requirements can vary according to the company structure. The Spanish Law on Companies (Ley de sociedades de capital) contains provisions concerning the nomination of the director and sets out who has representative power and their limitations.
Hide answer
9. If the right of representation must be registered, what legal effect does the registration have with respect to third parties?
Read answer
Yes, it is compulsory. Article 215 of the Spanish law on companies states that:
The appointment of directors, once accepted, must be submitted for registration in the Commercial Registry stating the identity of the appointees and, in relation to the directors that have been attributed representation of the company, whether they can act alone or need to do so jointly.
2. The submission to the register must be made within ten days of the date of acceptance.
So, the information contained in the Business Register is enforceable against third parties even if they had no knowledge about these registered facts; anyway the limitations to the power of representation (indicated in the Articles of Association or in the decision of the company board), even if registered, are automatically enforceable against third parties.
Article 213 deals with the bans imposed on directors.
In some cases some people are incompatible with the nomination as director.
After registration in the Business Register, the causes of invalid nomination are not enforceable against third parties unless the company proved that third parties had knowledge of such causes of invalid nomination.
Hide answer
The appointment of directors, once accepted, must be submitted for registration in the Commercial Registry stating the identity of the appointees and, in relation to the directors that have been attributed representation of the company, whether they can act alone or need to do so jointly.
2. The submission to the register must be made within ten days of the date of acceptance.
So, the information contained in the Business Register is enforceable against third parties even if they had no knowledge about these registered facts; anyway the limitations to the power of representation (indicated in the Articles of Association or in the decision of the company board), even if registered, are automatically enforceable against third parties.
Article 213 deals with the bans imposed on directors.
In some cases some people are incompatible with the nomination as director.
After registration in the Business Register, the causes of invalid nomination are not enforceable against third parties unless the company proved that third parties had knowledge of such causes of invalid nomination.
Hide answer
10. May the rights of the legal representative be restricted? If yes, please explain how (e.g. by laws or the articles of association)?
Read answer
Yes. The general rule is indicated by Articles 234 of the Spanish Law on Companies
As mentioned above, there could be limitations to the powers of representation and cases where the legal representative must act on the basis of the articles of association, in which case they can limit the rights of the legal representative, or by means of a decision of the administrative board or of the company’s partners.
Hide answer
As mentioned above, there could be limitations to the powers of representation and cases where the legal representative must act on the basis of the articles of association, in which case they can limit the rights of the legal representative, or by means of a decision of the administrative board or of the company’s partners.
Hide answer
11. Does that restriction have any legal effect towards third persons?
Read answer
The general rule is contained is Article 234 of the Spanish Law on Companies. Any limitation of the representative powers of the directors, even if they are registered in the Business Register, is ineffective against third parties.
The company shall be bound against third parties that have acted in good faith and without the aim of damaging the company, even when it is clear from the articles of association registered in the Business Register that the act is not included in the aims of the Company.
The violation of the above mentioned limitations (see answer to question 10) can only have effects in the company’s internal relationships and possibly expose the director to his/her liability against the company (or his/her revocation for just cause).
Hide answer
The company shall be bound against third parties that have acted in good faith and without the aim of damaging the company, even when it is clear from the articles of association registered in the Business Register that the act is not included in the aims of the Company.
The violation of the above mentioned limitations (see answer to question 10) can only have effects in the company’s internal relationships and possibly expose the director to his/her liability against the company (or his/her revocation for just cause).
Hide answer
12. How can the representative prove the right of representation (e.g. extract in paper from the registry certified by some authorities, extract from public registry)?
Read answer
Extract from the Business Register or authentic copy of the notarial document in which the representative was appointed that has been duly registered in the Business Register.
Hide answer
Hide answer
13. Are there any circumstances where the transactions entered into by the legal representative of a company are considered not binding on the company (e.g. for a valid transaction should there be a decision or consent of the shareholders, supervisory body)? If yes, please explain.
Read answer
See answers to questions 10 and 11.
Hide answer
Hide answer
14. Is it possible to verify the right of representation by digital means from the register? Please indicate the source and in which language the inquiries should be conducted.
Read answer
http://www.registradores.org
It is possible to check in real time by paying a fee by credit card. Enquiries are in Spanish but a multi-lingual platform is being created.
Hide answer
It is possible to check in real time by paying a fee by credit card. Enquiries are in Spanish but a multi-lingual platform is being created.
Hide answer
15. When anti-money laundering measures are applied, how are the beneficial owners of a legal entity registered in your country identified? Would there be different possibilities for professionals from other countries to identify the beneficial owners? Please indicate the source and in which language the inquiries should be conducted.
Read answer
The beneficial owner, according to Spanish law 10/2010 against money laundering and terrorist financing, is identified before the notary in a special act, called the “beneficial owner act” (acta de titularidad real). Whenever the company has to act, it needs to present the updated beneficial owner act and confirm its up-to-date-situation. Whenever a beneficial owner changes, a new act has to be produced.
A Beneficial Owner, according to Spanish legislation, is the person who owns 25% or more of the shares of the company.
The Spanish Notaries have created a repository of databases of beneficial owners, included in the Unified Index File, and in cooperation with the OCP (Organismo Centralizado Prevención del Blanqueo or Centralised Preventive Anti Money-Laundering Body).
Hide answer
A Beneficial Owner, according to Spanish legislation, is the person who owns 25% or more of the shares of the company.
The Spanish Notaries have created a repository of databases of beneficial owners, included in the Unified Index File, and in cooperation with the OCP (Organismo Centralizado Prevención del Blanqueo or Centralised Preventive Anti Money-Laundering Body).
Hide answer
