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04-07-2023

The transposition of the Company Digitisation Directive

The transposition of the Directive on the digitalisation of companies establishes, for the first time in the Spanish legal system, the possibility of incorporating a limited liability company in 6 hours, by videoconference and without the need to appear in person before a notary.

This European regulation, which is a minimum regulation (it establishes the bases of the digitisation process to be developed by each of the Member States), includes the following four essential lines:

  • A first and fundamental one, around which all the others revolve: the imposition of an obligation on Member States to establish in their respective legal systems a system of incorporation of capital companies entirely online. This is to be done without the need for applicants to appear in person before any authority or person or body empowered under national law to deal with any aspect of online company formation. This includes the execution of the instrument of incorporation and the contribution of share capital, with the possibility of requiring the physical presence of the applicant as an exception.
  • Secondly, this fully online procedure is extended to the entire life-cycle of the company, which means that a system for the online filing of the necessary documents must be provided.
  • Thirdly, this fully online procedure is also extended to the registration of branches.
  • Finally, in order to facilitate the establishment of this online procedure, provisions are introduced which affect the system of register publicity, the operation of the business registers and the cost of the service.

It is true that in Spain, at the date of publication of this law, there is already a procedure for the incorporation of limited liability companies by telematic means through the (*)CIRCE, which, with the use of the (*)DUE, involves a procedure for telematic incorporation and management of the formalities associated with the start-up of the activity, which is agile and not excessively costly. However, it is also true that this system requires the physical appearance of the founder or his representative before the notary. In addition, modification procedures subsequent to incorporation, as a general rule, require the physical presence of the administrators, or a proxy with sufficient power of attorney, before the notary. This law therefore modifies the system of telematic incorporation currently in force in our legal system, in order to comply with the European legislator’s mandate to establish an entirely online procedure, for which purpose it amends the Notaries Act, the Commercial Code and the Mortgage Act.

Capital Companies Act

The electronic incorporation of the limited liability company is regulated, but for its correct application it is necessary to harmonise the rest of the legal system, especially with regard to telematic notarial and registry intervention, in order to avoid inefficiencies in the system.

Commercial Code

It is amended to provide for an improvement in obtaining, free of charge, through the Business Register, relevant information on companies and their branches throughout the European Union.

Notaries Act

It is amended mainly in order to:

  • regulate an electronic protocol reflecting the matrices of public instruments and encourage the transfer to electronic format of all notarial documents,
  • establish the possibility of reasoned digital consultation of a single general computerised index by the General Council of Notaries and the public administrations, and
  • permit the execution of certain instruments by means of videoconferencing, qualified electronic signature and electronic appearance (practically any corporate act, with the exception of non-monetary contributions to share capital), defining the requirements to be followed for this purpose.

Mortgage Law

is amended in order to:

  • regulate the general and single electronic headquarters at national level,
  • allow communications with citizens and organisations by electronic means,
    regulate registry publicity by the same means (informative notes and registry certifications will always be issued in electronic format and support), and
  • create an additional computerised registry system and an electronic repository with updated information on properties.

Fiscal, administrative and social measures

Amended to:

  • allow registrars to use videoconferencing and interoperability systems with other registries,
  • regulate the access of interested parties to the open application in the electronic office of the registrars, using electronic identification systems, and
  • to impose interoperability of the information and communication systems used by notaries and registrars.

Electronic forms for electronic incorporation

  • The DUE, standard articles of association and the standardised public deed continue to be used, to which the Ministry of Industry, Trade and Tourism will have to make the necessary changes.
  • All these models and documentation must be accessible via the European digital gateway, and a communication link must be established with the notarial platform.

Contributions

  • Contributions shall be in cash only and must be made by means of an electronic payment instrument widely available in the European Union, which allows the person making the payment to be identified.
  • The payment instrument used must be provided by an electronic payment service provider or a financial institution established in a Member State.
  • The documentation, valuation and transmission of the cash contributions will be electronically implemented.
  • It is still possible to replace proof of the reality of the contributions with an undertaking by the founders to be liable to the company and its creditors for the reality of the contributions.

Commercial register and registration

  • The commercial register competent to receive all documents electronically remains that of the company’s registered office.
  • Where deeds in standardised form and standard articles of association are used, qualification and registration must be carried out within six working hours from the day following the date of the filing entry or, where applicable, the date of return of the document withdrawn.
  • Where standard forms or codified deeds are not used, the time limit for qualification and registration shall be five working days from the day following the day on which the document is lodged or, where appropriate, from the day on which the document withdrawn is returned.
  • If the final entry is made when the entry is made, the effects shall be backdated to that date.
  • If there are justified reasons, technical or otherwise, which make it impossible to comply with this time limit, the commercial registrar must notify the person concerned of this circumstance.

Exceptions to full online incorporation and without the need for the founders to appear in person before the notary

  • For reasons of public interest and in order to avoid any falsification of identity, the notary may, on a single occasion, require the physical appearance of the founder.
  • The notary may also require the founder to appear in person if the notary intends to check the capacity of the grantor and his powers of representation.
  • In any case, the notary must attach to the deed the reasons for requiring the physical appearance.
  • These exceptions only apply to the incorporation of the company, and the notary cannot require this physical appearance in the remaining stages of the company’s life.

Entry into force

Reform of company formation on 10 May 2023.

Notaries Act, 9 November 2023.

Reforms to the Commercial Code, the Mortgage Law on 9 May 2024.

If you have any queries regarding this subject, please do not hesitate to contact us by telephone at Núria Martí García or by e-mail at nmg@btsasociados.com, we will be delighted to help you.

(*)CIRCE: Information Centre and Business Creation Network.

(*)DUE: Documento Único Electrónico (Electronic Single Document)