Spain: Companies will now be able to carry out certain procedures with notaries and at registries without the signatory having to be physically present
Law 11/2023, published in the Official State Gazette on May 9, 2023, has adapted Spanish company law to the European directive on the use of digital tools and processes.
Law 11/2023 of May 8, 2023, transposing European Union directives on the accessibility of certain products and services, the migration of highly skilled persons, tax matters and the digitalization of procedures with notaries and at registries; and amending Law 12/2011 of May 27, 2011, on civil liability for nuclear damage or damage caused by radioactive materials has been published in the Official State Gazette. Among other provisions, this law adds important new legislation to company law, such as allowing certain procedures with notaries and at registries to be performed without the signatory having to be physically present.
The objective is to implement in Spanish law Directive (EU) 2019/1151 of the European Parliament and of the Council of 20 June 2019, amending Directive (EU) 2017/1132 as regards the use of digital tools and processes in company law. To achieve this aim, the new law amends the Law on the Notarial Profession; the Commercial Code; the Mortgage Law; Law 14/2000 of December 29, 2000, on tax, administrative and labor and social security measures; Law 24/2001 of December 27, 2001, on tax, administrative and labor and social security measures; and the revised Capital Companies Law, approved by Legislative Royal Decree 1/2020 of July 2, 2020 (LSC).
The main amendments to the Capital Companies Law affect the following articles:
- A new article 20 bis has been added to Title II, Chapter I of the Capital Companies Law, relating to the formation of capital companies, with definitions that will apply in the online formation process: “Electronic identification means”, "Electronic identification scheme", "Electronic Means", "Formation", "Registration of a branch" and "Template".
- A new article 22 bis has been added to Title II, Chapter II of the Capital Companies Law, which provides for the performance online of company law processes related to formation, any other transactions that may be entered at the registry, and those carried out to fulfill legal obligations affecting limited liability companies. The procedure cannot be conducted entirely online where the shareholders’ contribution to the share capital is made via non-monetary contributions.
- A new chapter has been added, Chapter III bis, in Title II, consisting of article 40 bis through article 40 quinquies, which provide for the online formation of a limited liability company with certain rules regarding the templates for formation and for the performance of non-monetary contributions, in addition to the time periods for registration at the commercial registry, in these cases, which range from six business hours running from the day following the date of the entry (in cases involving entries on standard templates) to five working days running from the day following the date of the filing entry (in other cases), with exceptions in cases justified by technical reasons or by the complexity of the matter.
It is stated that the notary may require the physical presence of the interested party once only for public interest reasons, in the stipulated cases, and the notary is required to attach the reasons for requiring that presence without this implying that other stages or elements may be completed online.
- A new subarticle has been added to article 213 of the Capital Companies Law, relating to the prohibitions disqualifying persons from being directors, which has determined that any disqualification or relevant information in force in another EU member may be taken into account, for the purposes of their disqualification from being a director of a Spanish company.
- The amendments to the Capital Companies Law came into force on the day after the publication of Law 11/2023 in the Official State Gazette, namely, on May 10, 2023.
Additionally, in brief, as we mentioned above, Law 11/2023 has amended the Commercial Code, the Mortgage Law, and the Law on the Notarial Profession to enable notaries and the registry to act remotely for the purpose of allowing the services of notaries and registries to be provided without the need for physical presence.
The Commercial Code has been reformed to include the commercial registry's obligation to ensure interconnection with the European central platform in the manner that will be determined by the provisions of EU law and the regulations implementing them. The commercial registry will also provide at no cost information on the specifications mentioned above, either directly or by redirecting the interested party to the European central platform. The amendments to the Commercial Code will come into force one year after the publication of Law 11/2023 in the Official State Gazette, namely, on May 9, 2024.
The amendments to the Mortgage Law focus essentially on regulating the general website, the possibility of citizens’ notifications or those with other bodies being made online, public disclosure at the registry taking place online also, the creation of an additional computerized registration system and an electronic repository with updated information on properties. The amendments to the Mortgage Law will come into force one year after the publication of Law 11/2023 in the Official State Gazette, namely, on May 9, 2024.
The Law on the Notarial Profession has been amended to regulate an electronic protocol reflecting the originals of public instruments, the option of a reasoned digital search of a single general computerized index by the General Council of Spanish Notaries and public authorities and the introduction of a new article providing for the signature of certain instruments via video conference or electronic appearance, as well as provisions on security and files. The amendments to the Law on the Notarial Profession will come into force six months after the publication of Law 11/2023 in the Official State Gazette, namely on November 9, 2023.
Lastly, the necessary amendments have been made to the legislation on tax administrative and labor and social security measures to allow registrars to use video conferencing systems and to operate with other registries, for the purposes of exercising their respective public functions under the Mortgage Law and other applicable laws and interested parties accessing the application opened on the registrars’ website using electronic identification systems. Moreover, it is provided that the information and communication systems used by registrars and notaries must be interoperable with each other to enable their communication and integration.