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The General Directorate of Notaries and Registries (GDNR) published a resolution on 11th July 2019 arising from an appeal against the refusal of the Mercantile Registrar XIX of Madrid to register a public deed of payment of passive dividends and increase in the share capital of a company. In this case, a joint-stock company filed a public deed of payment of passive dividends and increase of the share capital of the same company by means of non-monetary contributions at the Mercantile Registry for registration. However, the registrar refused registration, because, in his opinion, since the payment of passive dividends of the increased capital was made through non-monetary contributions, it should be accompanied by a report prepared by an independent expert, as referred to in article 67 of the Spanish Capital Companies Act, since none of the exceptions set out in article 69 of the same Act apply to the case in question.
The applicant appealed against this refusal, arguing that in view of the protected interest and the purpose of article 67 of the Spanish Capital Companies Act, the report issued by the independent expert may be dispensed with and replaced by the administrator’s report, since the latter is protective with respect to the interests of the shareholders and in this case the resolutions have been taken by the sole shareholder.
The General Directorate of Notaries and Registries (GDNR) explained that the purpose of article 67 of the Spanish Capital Companies Act (the requirement of an appraisal from an independent expert regarding the non-monetary contributions) is to ensure the correct quantitative composition of the share capital, by preventing it from serving as cover to fictitious or overvalued provisions. It is thus a requirement which is called for not only in the interest of the partners or shareholders, in this case, but especially in the interest of the company’s creditors, thus, said requirement cannot be dispensed with due to the fact that the increase in the counter-value in question has been decided by the sole partner/shareholder of a sole partner/shareholder company.
Consequently, the DGRN dismissed the action and upheld the appealed refusal of the Registrar.
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Barcelona, 6th September 2019