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I. Corporate object and CNAE (clasificaicón nacional de actividades económicas – national classification of economic activities) number.

When a company is incorporated the specific activities which shall integrate the corporate object must be determined. Often, from the start, clients have a clear idea of the business they will carry out, but in general, it is recommendable to establish a broad corporate object including diverse business activities which may be of interest in the medium or long term.

In this way, if the company wishes to carry out an activity already contemplated in the bylaws, it shall not be necessary for the decision to do so to be passed in the general meeting, be brought into a public deed before a notary public and registered at the Commercial Registry, with the costs and time that all this implies.

Likewise, as well as the activities constituting the corporate object, the public deed of incorporation of the company must identify the principle activity to be carried out by the new company with reference to the business activity code which best describes the business according to the CNAE (clasificaicón nacional de actividades económicas – national classification of economic activities), in accordance with article 20 of the Law 14/2013, of 27th September, to support entrepreneurs and their internationalisation.

The obligation to express the CNAE number has a strictly statistical purpose, and it is sufficient to just declare one code relative to the principle activity carried out by the company, even if the corporate object contains multiple possible business activities. This is so confirmed by the Directorate General for Registers and Notaries, in resolution of 13th February 2015 among others.

However, it is important that the activity or activities set forth in the corporate object are in line with the activity indicated in the public deed of incorporation, given that the register of the Commercial Registry shall verify that said code is sufficiently relevant to the contents in the list in force according to the  national classification of economic activities, otherwise the registration of the public deed may be refused.

For this reason, when drafting the activity or    activities of the company, in order to assign them to the corporate object, one option not to be dismissed is to refer to the activity codes in the  national classification of economic activities, as well as the codes of the Business Activity Tax (Impuesto de Actividades Económicas – IAE).

Once a broad corporate object has been established which includes diverse activities and once the CNAE code has been declared, the following question arises:

II. Can a business activity be changed without modifying the bylaws?

Let’s imagine a company which has anticipated various activities in the corporate object, as we recommended at the beginning, but during many years it has only carried out one of said activities, which we shall call the “principal” or “real” activity.

At any given time, the administration organ decides (whether under its own or supervening decision, or due to market circumstances) to dispense with the principal activity and recover one or several of the activities contemplated in the corporate object without the consent of the general meeting.

When the partners or shareholders become  aware of the change of course made unilaterally by the management body, they warn the latter that they have not given their assent to the change to the real activity which constitutes the corporate purpose, and they are required to call a meeting to adopt a resolution to dissolve the company on the grounds that there is a cause for legal dissolution, specifically as provided for in sections (a) and (c) of Article 363.1 of the Spanish Companies Act:

Article 363. Causes for dissolution

  1. A capital company shall be dissolved:

 a) upon the cease of the activity or activities which constitute the corporate purpose. In particular, inactivity for over one year shall be deemed to constitute cease.


c) Where achievement of the corporate purpose is manifestly impossible.

 However, the management body upholds that the “new activity” which the company has started to develop is reflected in the corporate purpose and furthermore it is profitable, therefore “the activity or activities which constitute the corporate purpose” has or have not ceased – although it does in the main activity – nor does there occur a manifest impossibility of achieving the corporate purpose, which is understood to be making profits through the performance of the economic activity that constitutes the corporate purpose.

Faced with this situation, we must resort to the doctrinal debate on whether the corporate interest is the sum of the particular interests of the partners/shareholders (contractual theory); or whether it exceeds the private interest of the partners/shareholders (institutionalist theory).

For more information, please contact

Carla Villavicencio

18th of May 2018

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