INTRODUCTION
In the judgement of 20th of March of 2013, the Supreme Court of Spain deals with the matter of the capacity of a company to take part in legal proceedings, as well as its liability before creditors, once it is extinguished.
LIABILITY BEFORE CREDITORS
According to the Court, the settlement of debts does not affect the potential defects in the wind up. The definitive extinction of the company will take place only when the wind up reflects reality; meaning, only when the company has been correctly liquidated, and no creditor remains unsatisfied, no partners are left unpaid or there are no assets which have not been distributed.
Therefore, the inscription of the wind up in the companies registry does not entail the dissolution “ex tunc” of the company in the commercial sphere, since the company will still be liable for its obligations.
CAPACITY TO TAKE PART IN LEGAL PROCEEDINGS
As set out in the mentioned judgment, the legal personality of a company does not conclude with the formalisation of the dissolution, but when all legal relations have ended.
In this sense, the Supreme Court refers to this situation as “controlled personality”.
CONCLUSION
Even though the company is dissolved and has been registered as such with the companies registry, it still maintains its liabilities before creditors and may take part in legal proceedings.
Vilá Abogados
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18th of July 2013
