Commercial companies need the intervention of specific individuals, who, as management bodies forming part of the company structure, express the will of the legal entity itself before third parties.
Thus, art. 233.2 d) of the Spanish Capital Companies Act (“LSC”) establishes that, in the case of limited liability companies with more than two joint administrators, the representation will be jointly exercised by at least two of them, in the manner determined in the bylaws.
In a recent Resolution of the Directorate General of Registries and Notaries (hereinafter “DGRN”) of 18th October 2016, the case of a limited liability company seeking the registration of a provision of the company bylaws was disputed. This provision had the heading: “the company shall be governed, by election of the general meeting, by various joint administrators, with a minimum of three and a maximum of seven”. The Registrar rejected the registration because he considered that the provision does not determine to whom the exercise of the power of representation corresponds and why it could not be left to the discretion of the general meeting.
The claimant argued that in this case the power of representation must be exercised with the joint action of all of the administrators, because the bylaws do not exempt any of them and thus does not allow the action of only some of the administrators.
However, the DGRN does not support this interpretation and reiterates that the mentioned bylaws only determine that the company shall be governed by the administrators, without specifically assigning the representation in any form and, therefore, it does not respect the minimum requirement that says that the mentioned representation should be exercised by at least two of the administrators jointly, in order for the provision to be registered at the Commercial Register.
In the end, the claimant argued that previously the same Commercial Register had accepted other public deeds with identical bylaw provisions, but the DGRN rejects the argument and based its answer upon previous resolutions which made it clear that, when the Registrars qualify the documents filed for registration, they are not linked, due to the application of the principle of professional independence, to other qualifications carried by other registrars, or to their own previous qualifications regarding the filing of other public deeds.
This Resolution of the DGRN confirms another two resolutions regarding this matter of 28th April and 8th June of 2016.
Hugo Ester Laín
Vilá Abogados
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18th November 2016
