The Spanish Capital Company’s Act explicitly provides the possibility for a company’s administration to be assigned to another company, a paradoxical fact, given that a priori the figure of an administrator exists due to the inability of a company to manage itself.

This inevitably leads us to the following questions:

Who will exercise “de facto” the duties of administrator; that is, who will perform the duties assigned by law to the administrator?

What level of responsibility will he or she bear in the development of the duties which a priori concern the administrator company?

In the following we provide answers to such questions:

Appointment of a natural person as legal representative

Art. 212 bis of the Spanish Capital Company’s Act provides that “if a legal entity is appointed as administrator, it will be necessary for the legal entity to assign a natural person to permanently exercise the duties inherent to the position.” In regards to this point, it has to be stressed that:

  • The identity of the person appointed as representative must be registered with the Companies Registry at the same time that the appointment of the administrator legal entity is entered upon the administrator company’s registration sheet at said registry.
  • Only one person can be assigned as legal representative, so no possibility exists for the assignment of several natural persons, jointly or severally.
  • The appointed person shall meet the legal requirements that administrators must fulfil in order to be appointed, such as not having been disqualified for the position of administrator, or having been judicially determined incompetent, and likewise:
  • The appointment of the representative should be made by the administrative body of the company appointed as administrator legal entity as, amongst others, provided in the Resolution of the Directorate General of Registers and Notaries, of 10 July 2013.
  • Should the person appointed as representative belong to the administrative body of the administrator legal entity, the certificate of the agreement made by the administrative body of the company designated as administrator shall be sufficient for such appointment, whereas otherwise the appointment should be recorded in a public deed.

Responsibilities of the legal representative

With respect to responsibilities, Article 236.5 of the Spanish Capital Company’s Act provides that “the natural person assigned to permanently exercise the duties inherent to the position of legal representative […] will be subject to the same duties and will be jointly and severally responsible with the administered legal entity.”

In that regard, the person appointed representative of the administrator company will be jointly and severally responsible with said company for any damages caused – and which may be attributable according to the Law – in carrying out the position, both before the administered company itself and third parties. This is why appointing a legal entity as administrator will not result in a firewall preventing the responsibility of said administrator; on the contrary, it will imply that responsibility falls on two persons (legal and natural), jointly.

 

Vilá Abogados

 

For more information, please contact:

va@vila.es

 

29th April 2016