In the Official Gazette of the Government of Spain of the 25th February 2021, the Resolution of the General Directorate of Legal Security and Public Trust, of the 10th February 2021, was published, in relation to a negative decision given by the registrar of the Commercial Registry of Madrid upon registering the appointment of a managing director and the delegation of powers of a Spanish limited liability company (S.L. – Sociedad de responsabilidad limitada) to said managing director.
In this case, the general meeting of the company in question approved the resignation of a board member and appointed another one in their place, and the board of directors appointed a managing director who would be given all powers which are legally and statutorily delegable, but with the particularity that the delegated powers involving an economic transaction of more than one million euros could only be exercised jointly, with one of the two people indicated.
The registrar of the Commercial Registry of Madrid suspends the registration of said agreement because, in their opinion, the representative powers of the managing director cannot be restricted by limitations which have the potential to be opposed by third parties, given the typical content of the company’s power of attorney.
An appeal was filed against this suspension with the allegation that the registrar’s interpretation does not correspond with that said in the Spanish Companies Act (“SCA”). Article 249.1 of said Act establishes:
“When the company bylaws do not state otherwise, and without prejudice to the powers of attorney that may be conferred to any person, the board of directors may appoint any of its members as one or more managing directors or executive committees, establishing the content, the limits and the types of the delegation.”
Although the Directorate recognises that said article stipulates that the delegating board of directors may establish “the content, the limits and the types of the delegation”, its opinion shows that as a result of the systematic interpretation of this regulation, the determination of the content and the limits of the powers does not allow for the limitation of the typical content of the power of attorney, the main reason for this being the interpretation of article 234 of the SCA: the content or scope of the power of attorney is without doubt definitive.
This interpretation is confirmed in light of article 149 of the Commercial Registry Regulations. Said article provides that the registration of the agreement of the board of directors in relation to the delegation of powers to one or more managing directors, and the appointment of these directors, must include either the specified list of the powers delegated to them, or the assertion that all legally and statutorily delegable powers are delegated. The article also establishes that the scope of the power of attorney of the delegated bodies is always that determined by the Law in relation to the directors, namely that specified in article 234 of the SCA.
The reason for classifying the scope and the content of the power of attorney of the managing directors is, undoubtedly, the protection of third parties, who will not be required to make any enquiries regarding the limitations of the power of attorney derived from the company bylaws or from the delegation agreement, in a way in which such limitations will be ineffective for third parties, even when they are registered in the Commercial Registry.
And, as a result, the General Directorate rejects the filed appeal.
Mika Tsuyuki
Vilá Abogados
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5th March 2021
