Commercial Registry: Functions and Legal Principles
Functions of the Territorial Commercial Registry
Besides its advertising function, the Territorial Commercial Registry is assigned other key functions:
- Legalization of company books.
- Appointment of independent experts for the valuation of in-kind contributions in public limited companies (SA) or limited partnerships by shares, and for cases of company mergers or divisions. It is also responsible for appointing auditors.
- Deposit and publication of annual accounts for limited liability companies and corporate groups.
For the registration of a business, the legalization of its books, and the appointment of experts and auditors, the relevant territorial commercial registry corresponding to its domicile shall be responsible.
Key Principles of the Commercial Registry
- Principle of Personal Folio: The organization of the Commercial Registry (RM) is based on subjective, not objective, criteria; meaning it is organized around subjects (e.g., companies, individuals) rather than the types of acts that can be registered.
- Principle of Compulsory Registration: Registration is mandatory in cases specified by law for legal entities and for shipping companies. For natural persons, registration is optional, but its absence does not prevent the registration of any document or act concerning the business.
- Principle of Public Access: The registry is public, and its records are accessible to the public.
- Principle of Priority: Entries are processed in order of presentation.
- Principle of Successive Tract: For recording acts or contracts related to a business, prior registration of the business itself is required. Similarly, the registration of acts or contracts that derive from previous registrations also requires those prior registrations to be in place.
- Principle of Legality: No act or contract that does not comply with the law can be accessed or registered in the registry. To ensure this, the Registrar reviews the documents presented for registration, verifying the legality of the act or transaction, its extrinsic forms, the capacity and legitimacy of the parties involved, and whether the mandatory provisions of applicable law have been respected. The Registrar’s assessment is limited to granting, suspending, or denying the requested entry.
- Principle of Legitimacy: Once an act or contract is registered, it is rebuttably presumed valid and accurate, unless a corresponding inaccuracy or judicial declaration of nullity is registered.
- Principle of Public Faith: The declaration of invalidity or inaccuracy of entries in the Commercial Registry shall not prejudice the rights of third parties acquired in good faith in accordance with the law (Art. 8 RRM).
- Principle of Formal Publicity: The Commercial Registry (MR) is public, and any person, without having to justify their interest, can view its data by simply requesting informative notes, certifications, or by consulting the Official Gazette of the Commercial Registry (BORME).
- Principle of Material Publicity (Enforceability): This principle refers to the legal effectiveness of registered facts for third parties. Material publicity is achieved through registration and subsequent publication in the BORME of what has been recorded.
Material Publicity: Positive and Negative Effects
We must distinguish two aspects: positive material publicity and negative material publicity. The specific effects of positive material publicity are:
- Instruments subject to registration will only be effective against third parties acting in good faith from the date of their publication in the BORME.
- When transactions are performed within 15 days after publication in the BORME, the published registered documents will not be enforceable against third parties who can prove they could not have known about them.
- If there is a discrepancy between what is published and what is registered, third parties acting in good faith may rely on the publication if it is favorable to them (i.e., unless there is subjective bad faith, meaning the party seeking to benefit from the divergence knew the reality).
- The good faith of the third party is presumed until it is proven that they knew about the act subject to registration but not registered, or registered but not immediately published, or the difference between what is recorded and published.
The effects of negative material publicity specify that acts or contracts subject to registration, which have not been registered, will not produce effects against third parties acting in good faith (although they may be effective inter partes).