Law  11/2023 of 8th May regarding the transposition of various EU Directives, was published in Spain on 9th May 2023 (hereinafter referred to as the “Transposition Act”), among which EU Directive 2019/1151 stands out, of 20th June 2019, known as the “company digitalisation directive”, regarding the digitalisation of notary and registry procedures (hereinafter referred to as the “Directive”).

One of the main new developments of the Transposition Act consists of the online incorporation of limited companies, without the need to appear before a notary public (Title IV). Even though in Spain the possibility for the telematic incorporation of limited companies already exists via the CIRCE system (Centro de Información y Red de Creación de Empresas – Centre for Information and Company Formation Network), this requires appearing before a notary public in order to formalise the incorporation.

Through the transposition of the Directive, the possibility to incorporate limited liability companies in a digital manner becomes regulated in article 22 bis of the Legislative Royal Decree 1/2010 of 2nd July, approving the consolidated text of the Spanish Companies Act (hereinafter the “Spanish Companies Act“). Pursuant to this article, electronic incorporation shall only apply to limited liability companies, provided that they are incorporated by means of monetary contributions; therefore, the incorporation of other types of companies, or limited liability companies that are incorporated by means of non-monetary contributions, is excluded from the electronic system.

The contents of the aforementioned article 22 bis of the Spanish Companies Act is developed in Chapter III bis (Title II) in the following terms:

  • The use of electronic forms for electronic incorporation is envisaged (which must be drafted in Spanish and the co-official languages in Spain, as well as in English);
  • The method of making monetary contributions required for the incorporation of companies is determined, and shall consist of the use of payment instruments provided by an electronic payment service provider or a financial institution established in an EU Member State which allow the identification of the person making the payment;
  • The time limit for the registration of the public deed of incorporation is set at 6 working hours as from the moment of filing the document with the Registry for registration purposes (in the case of standardised articles and standard company bylaws), in other cases it would take longer, 5 working days as from the moment of filing.
  • An exception is made (only in the case of the incorporation of companies) whereby the notary may require the physical appearance of the grantor of the public deed for reasons of public interest, in order to avoid the falsification of identity, or for the purpose of verifying the capacity of the grantor and his/her powers of representation.

Exceptionally, if it is necessary to appear in person for the telematic incorporation of a company, it should be noted that, if such an appearance is required for one of the reasons stated above, the notary must indicate the reasons for requiring the appearance in the  public deed of incorporation.

In addition to the amendments to the Spanish Companies Act, the Transposition Act has introduced a number of amendments to the following regulations (reflected in Title IV), precisely in order to be able to implement the electronic incorporation of companies:

1.- Notaries Act

Certain articles are amended in order to establish an electronic protocol for public deeds that are granted, to digitalise all notarial documents, to empower notaries to issue authorised copies with electronic signatures, to guarantee the possibility of granting public deeds via videoconference in certain matters (incorporation of companies, powers of attorney, minutes of general meetings, etc.) and to provide the grantor with access to the notary’s electronic office application through the use of the electronic identification systems provided for in Article 9 of Law 39/2015, of 1stOctober, on the Common Administrative Procedure of Public Administrations.

2.- Law 14/2000 on fiscal and administrative measures, and social order

This law is modified with the purpose of reinforcing the disciplinary system of the single body of notaries in order to avoid the granting of public deeds by videoconference without observing the requirements established for this in the Notaries Act.

3.- Commercial Code

Article 17.5 now provides for the possibility of obtaining relevant information on companies and their branches in the European Union from the Companies Registry free of charge.

4.- Mortgage Act

A series of modifications are introduced aimed at establishing a single general electronic headquarters at national level, enabling citizens to communicate with the relevant bodies by electronic means, issuing information notes and registry certificates in electronic format and setting up a computerised registry system to provide up-to-date information on the relevant properties.

5.- Law 14/2000 on fiscal and administrative measures, and social order

This law is modified with the purpose of allowing registrars to use videoconference systems with other registries, as well as for regulating the access to interested parties to the electronic office of the registrars via the corresponding application through the use of electronic identification systems.

With the transposition of the Directive, the digital advance of our legal system in corporate matters is evident. However, the changes to our legal system introduced by the Transposition Act entails major changes in the management of corporate procedures, especially regarding the incorporation of companies, for which it will be necessary to see to what extent the parties involved (interested parties, notaries, registrars, banks, etc.) will be able to adapt to the digitalisation of companies and with what degree of agility.

Other issues pending clarification are what will happen when faced with potential technical failure during a videoconference (suspension of the act, postponement, repetition, etc.) and how the notary application used by notaries to carry out videoconferences will work (perhaps the use of a QR code may be a way of accessing the contents of the relevant notarial deed by electronic means).

The Transposition Act entered into force the day following the publication thereof, that is, on 10th May 2023, albeit with a few exceptions regarding Title IV:

  • Articles 34 (on the modification of the Notaries Act) and 37 (on the modification of Act 14/2000 on fiscal and administrative measures, and social order) enter into force 6 months following the publication of the Transposition Act;
  • Articles 35 (on the modification of the Commercial Code), 36 (on the modification of the Mortgages Act) and 38 (on the modification of Act 24/2011 on fiscal and administrative measures, and social order) enter into force one year following the publication of the Transposition Act;

Albert Zúñiga Carulla

Vilá Abogados

 

For more information, please contact:

va@vila.es

 

1st September 2023