The resolution of 14th October 2020 issued by the General Directorate of Legal Security and Public Trust – GDLSPT (Dirección General de Seguridad Jurídica y Fe Pública-DGSJFP) addresses the appeal filed against the refusal of the registrar of Barcelona Commercial Registry to register a public deed of agreements adopted by the general meeting of a joint-stock company.
I. Background
On 2nd May 2020, the general meeting of a joint-stock company agreed to re-elect the sole director of the company for the statutory period of five years, from 1st July 2018 (the day on which their position had expired, although the sole director continued to exercise de facto the corporate management during the legal vacancy of the post; as well as to ratify and approve all of the acts which the director had executed since the expiry of her position.
The aforementioned agreements were notarised through the deed brought into public on 19th June 2020.
The registrar denied the registration of the public deed, for the re-election had taken place on 2nd May 2020 and therefore the appointment could only have occurred after that date, without any retroactive effect being attributed to the appointment.
The notary authorising the public deed of social agreements filed an appeal against the negative review, alleging that:
(i) the attribution of retroactive effect to appointments is not expressly forbidden, and
(ii) the idea maintained in the registrar’s decision is contrary to the general principle of the notorious factor, namely the limitlessness of the representation of the company directors and of the protection of the third party in commercial and corporate traffic.
II. Resolution of the GDLSPT
The GDLSPT rejected the appeal and confirmed the contested decision of the registrar, due to the following factors:
a) The Spanish Companies Act states that the directors of a joint-stock company exercise the position during the period established by the company bylaws, which cannot exceed six years -article 221.2.1º of the Spanish Companies Act-.
b) If the duration of the director’s position has been established for a number of years (in the case in question, for five years), the appointment of the director expires when, at the end of their term, a general meeting has been held or the deadline for holding the meeting which is due to resolve the approval of the annual accounts of the previous financial year has passed – article 222 of the same legal text-.
c) The GDLSPT has established that the calculation of the duration of the position of the director must be carried out considering <<dies a quo>> (date from which) to be the date of the appointment, and not the date of the approval of the minutes of the general meeting nor the date of the acceptance of the appointment.
d) The appointment or re-election of the director has to be clear -articles 214 of the Companies Act, 138, 141, 142 and 144 of the Commercial Registry Regulations).
e) Re-election, even if it implies continuity in the position, actually means a previous termination and does not imply an extension, but rather a re-appointment, in compliance with the same requirements of any other appointment.
f) The general meeting, when appointing a director, cannot fix a set term of office which is less than that established in the company bylaws.
All of the above is independent of the validity of all the acts carried out by the director in the interregnum between the expiration of her position (1st July 2018) and her re-election (2nd May 2020) validated and approved by the general meeting, outside of the scope of the Commercial Registry.
Carla Villavicencio
Vilá Abogados
For more information, please contact:
5th February 2021
