Commercial Registry in Spain: Operations and Legal Framework

Posted on Dec 12, 2024 in Law & Jurisprudence

Concept and Character of the Commercial Registry

The Commercial Registry is a public office under the Directorate General of Registries and Notaries, which depends on the Ministry of Justice. The Registry is committed to a registrar, who assumes the office through a competitive examination. These competitions should be made public to ensure transparency in commercial activities.

  • Seating: Article 35 to 37 of the Mercantile Registry Regulation (MRR).
  • Registry: Article 14 to 15 of the MRR.
  • Books: Article 23 to 32 of the MRR.

The Commercial Registry is public, and its advertising is made effective through the certification issued by the registry entries or by an information notice (Article 23 of the Commercial Code). The certification will be the only way to reliably establish the contents of the entries in the registry. Article 23.4 refers to telematic information. Everything contained in Article 23.4 of the Commercial Code is called formal advertising, that is, the instruments by which we know the content of the entries.

Advertising Material and its Effects

Advertising material is achieved with the registration and subsequent publication in the Official Gazette of the Mercantile Registry (BORME). A registrable fact may or may not be registered:

  • If registered: Positive publicity material.
  • If not registered: Negative publicity material.

Positive Publicity (Article 21 of the Commercial Code, Article 9 of the MRR)

This refers to the enforceability against third parties of the act recorded and posted on the BORME. Instruments subject to registration will only be effective against third parties in good faith from the date of their publication in the BORME. However, certain circumstances may occur:

  • Operations carried out within 15 days of publication shall not be binding on third parties (a vacatio period for awareness).
  • In case of conflict between what is recorded and what is published, a bona fide third party may rely on the contents of the publication if it is beneficial. The person responsible for this discrepancy must answer to the employer.

Good faith is presumed. To break this good faith, one must prove it, which can occur in three cases:

  1. The third party, despite the absence of registration, knows the fact.
  2. The act was registered but not published.
  3. The third party knew the difference between what is recorded and what is published.

In these cases, the third party is not protected by positive publicity material.

Negative Publicity (Article 16.1 of the Commercial Code)

Only one who ignores the act subject to registration and not registered is affected. For example, an act subject to registration is the advertising factor. It only affects the individual who ignores the act. If the obligation required to be fully effective requires entry in the registry, whoever was registered and has not done so cannot claim a failure to register to get rid of fulfilling the obligation.

Example: If a company mortgages its assets, it must register such a security right. If the employer does not register that the company is under warranty, and there is no payment and execution, the creditor is not affected. Since it is an act that cannot be held, failure to register does not absolve the obligation.

Purpose of Registration (Articles 16 and 21)

Not everything can be recorded in the Mercantile Registry. Article 16 of the Commercial Code specifies the acts and things that are capable of registration. During the term of the MRR of 1919, registrars carried out registrations very freely, including acts that were not specified in the rules. The Supreme Court stated that the effects of advertising only affected the registrable facts as provided by the standard.

The doctrine has defended the character of numerus clausus (closed number) of recordable acts, and thus Article 16 maintains this character. Professor Paz-Ares raises the possibility of analogy, that is, an act that falls outside of the norm but is similar to another contained in the standard. However, he recognizes that rebuttable analogy is not appropriate because it would ultimately admit the entry of any acts that occur in traffic.

The Mercantile Registry has a limited purpose: to publicize events, commercial acts, and those that are most basic to the exercise of entrepreneurial activity. The Retail Law has added an extension to the order of registration (4th additional provision): the legal status of any entities engaged in wholesale or retail must register, provided that in the exercise, they have made acquisitions or sales of over 100 million pesetas.

Organization and Procedure of the Commercial Registry

The Commercial Registry follows the provincial management of the state. There is a Mercantile Registry in each provincial capital and also in the cities of Ceuta and Melilla. Another registry can be opened due to organizational needs.

The organization of the Mercantile Registry office is governed by independent books (Article 23 of the MRR):

  • Journal of presentation.
  • Book of records.
  • Book of legalizations.
  • Book of deposit accounts.
  • Appointments of independent experts and auditors.
  • Indexes.
  • Inventory.

The Personal Property Registry office is shared with the Mercantile Registry, but it is not a single registry. The following articles and Article 23 regulate the formalities of registration. If we disagree with the characterization of the registrar, we have a number of resources of a governmental character (Articles 66 to 76 of the MRR).

Finally, there is the Central Mercantile Registry (Article 17.3 of the Commercial Code, Article 380 of the MRR). The purpose of the Central Mercantile Registry (Article 379 of the MRR) is:

  • The management, treatment, and purely informational advertising of data received from commercial registries.
  • The filing and publication of corporate names of legal persons (name of the company).
  • The registration of companies that have moved their headquarters abroad without loss of Spanish nationality.
  • The publication of the BORME.

Registration of Individual Firms

The current wording is the same as that of the Commercial Code of 1829: entry in the Mercantile Registry will be optional for individual entrepreneurs, with the exception of shipping (Article 19 of the Commercial Code). However, if the individual entrepreneur is not registered, they cannot register any documents.

With the reform, the aim was to encourage entrepreneurship through indirect means for registering, even though it was not required. Example: If you do not enroll, you cannot register documents. However, the individual entrepreneur, even if not registered, can legalize the books and deposit the annual accounts.

Registration is handled through a public document. However, there is an exception to the principle of public ownership (Article 5 of the Commercial Code): It is possible for the individual entrepreneur to issue their first registration by merely making a statement to the Registrar, willing to register, and it only needs their signature acknowledged by a notary (Article 93 of the Commercial Code). They must submit the Certificates of Tax Administration for the start of economic activity.

The following are entitled to apply for the first entry:

  • The employer.
  • The guardian of the minor or incompetent.
  • The judicial or administrative authority.
  • The spouse of a married person not registered.

Circumstances that must be recorded in the first personal sheet:

  • Identity of the employer.
  • Name of the commercial establishment.
  • Principal place of business.
  • Object of the company.
  • Date of starting operations.

If married:

  • Identity of the spouse.
  • Date and place of marriage.
  • Economic regime of the marriage.
  • Data of the Civil Registry of the marriage.

Acts to be registered:

  • The general powers granted.
  • The modification of these.
  • The opening and closing of branches.
  • Judicial declarations that modify the capacity of the entrepreneur.

All these inscriptions are not of equal worth; some have:

  • Constitutive effect: If registration is lacking, they are not enforceable against third parties.
    • Revocation of spousal consent.
    • Revocation of powers granted.
  • Informative effect: (There is a special register for names and labels).
    • Commercial name.
    • Label.

Registration of Societies

Registration is compulsory; this term covers all types of companies. Article 19.2 of the Commercial Code states that registration is mandatory. Societies, strictly speaking, are only limited, restricted, collective, etc. But alongside these, there are other entities such as savings banks, mutual insurance cooperatives, pension funds, etc. (Article 16 of the Commercial Code). For all of them, enrollment in the Mercantile Registry is required.

When does the company acquire legal personality? Article 17 of the Commercial Code states that the commercial company contract concluded in accordance with the requirements of law shall be valid and obligatory upon it being signed. There are different degrees of legal personality. At times, entry in the Mercantile Registry is constitutive (capitalist societies), that is, registration is required for the company to acquire legal personality. Sometimes, it is merely declarative (partnerships), that is, it does not require registration to acquire legal personality.

Article 16 of the Limited Liability Companies Law (LSA) states that if the will not to register the company is verified, and in any event within one year from the deed without having applied for registration, any partner may request the dissolution of the company and demand a refund of their contributions.

There are entities that must register in advance in another register to join the Mercantile Registry, thereby acquiring legal personality (cooperatives, etc.).

Acts to be Registered

In the open sheet of business entities, the following shall be recorded:

  • The act of incorporation and amendments thereto.
  • The split, merger, dissolution, and reactivation of the entity.
  • Creation of branches.
  • Appointments and resignations of directors, liquidators, and auditors.
  • The general powers.
  • The issuance of bonds or other securities.
  • Any other circumstance determined by law or regulation.

Article 16.5 of the Commercial Code speaks of the object of registration: The Mercantile Registry is for the registration of any person or entity. This allows it to serve the future so that the legislator leaves part to enroll future entities.