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This entry is a reply to a tweet by Joaquín Noval, to which I committed myself a few days ago, from his entry in the blog alfilabogados.blogspot.com.es, entitled “TERMINATION OF THE ADMINISTRATOR, DEPOSIT OF ACCOUNTS AND COMMERCIAL REGISTRY”, which can be consulted by clicking here.
I do not intend to argue or anything like that, I simply want to help, to a certain extent, all those who, after presenting a deed in the Commercial Registry, are returned with the recurring defect “The commercial register has been closed due to failure to file annual accounts (Article 378 of the Commercial Register Regulations)”.
Can anything be done in this situation, apart from submitting the annual accounts? Yes, and the way to do it is what I will try to answer in these lines, for which we must start from three concepts: the formulation, approval and filing of the annual accounts.
to.- Formulation of the annual accounts.
Pursuant to article 253 of the Capital Companies Act, directors are required to prepare, within a maximum period of three months from the close of the financial year (normally 31 December), the annual accounts, the management report and the proposal for the application of the profit, as well as, where appropriate, the consolidated accounts and management report.
b.- Approval of the annual accounts.-
Pursuant to articles 160 and 272 of the Capital Companies Act, the annual accounts must be approved by the General Meeting of Shareholders, and companies are required to hold a general meeting, which is called ordinary, within the first six months of each financial year (normally before June 30 of each year), to approve the corporate management, the accounts of the previous financial year and decide on the application of the results.
c.- Filing of annual accounts.-
Pursuant to Article 279 of the Capital Companies Act, within one month following the approval of the annual accounts, the company's directors shall submit, for deposit in the Commercial Registry of the registered office, certification of the resolutions of the shareholders' meeting approving said accounts, duly signed, and of the application of the result, as well as, where applicable, the consolidated accounts, to which a copy of each of them shall be attached.
As an incentive for directors to prepare the annual accounts, comply with the obligation to call the Meeting for approval and to deposit them, article 378.1 of the Commercial Registry Regulations establishes that "After one year has elapsed from the date of the closing of the financial year without the duly approved annual accounts having been filed in the Registry, the Commercial Registrar will not register any document submitted after that date, until the deposit has been made beforehand..”
That is to say, and as an example, if a financial year ended on 31 December 2014, there will be no problem registering any document in the Commercial Registry until 31 December 2015, but from 1 January 2016, if the accounts for the 2014 financial year, which require prior formulation by the directors and approval by the General Meeting of shareholders, have not been deposited in the Commercial Registry, the Commercial Registry is blocked, with some exceptions, such as the titles relating to the termination or resignation of Directors, Managers, General Directors or Liquidators, and the revocation or resignation of powers, as well as the dissolution of the company and the appointment of liquidators and the entries ordered by the judicial or administrative authority.
The reason for allowing access to the record of termination or resignation of Directors is because it is very likely, in the case of termination, that the company has dismissed them for not fulfilling their duties, or in the case of resignation, because it is convenient to allow the director to completely disassociate himself from the company, and avoid him appearing as such in front of third parties, and being able to be held responsible, taking the necessary measures so that the company is not left without an administrator, which could lead to the need to call a shareholders' meeting, to appoint a new one.
However, it may happen that companies do not approve the annual accounts, and that it is therefore impossible to comply with the obligation to file them. There are countless examples, and almost as many as there are companies. There may be a deadlock, there may be a mistake, the accountants may not perform their duties properly...
Allowing a company to be paralyzed in these cases and unable to register any agreement may be excessive. Therefore, to avoid the rigor of article 378.1 RRM, paragraph 5 of the same article tells us that "If the annual accounts have not been filed because they have not been approved by the General Meeting, the registration will not be closed when this circumstance is accredited by a certificate from the administrative body with authenticated signatures, in which the reason for the lack of approval will be stated or by an authorized copy of the notarial minutes of the General Meeting in which the non-approval of the annual accounts is recorded."
The drafting of this provision led the General Directorate of Registries and Notaries, through various resolutions (July 15, 2005, July 14, 2005, July 2, 2005, July 16, 2005, July 19, 2005, July 20, 2005, August 2, 2005), to establish the doctrine, in order to avoid condemning companies to "life imprisonment" of registry closure when for any reason they could not approve their annual accounts, that the Registrars cannot enter into the qualification of the cause of the non-approval of the annual accounts, that is, they cannot assess the substance of the matter.
In this way, if the administrator with current office presents a certification, with a notarized signature, such as the one shown below, the closure of the Commercial Registry can be avoided.
“**, of legal age, businessman, resident of ** (*), domiciled at ** street, number ** with national identity document and NIF number **, acting in his capacity as sole administrator of the commercial entity called “**, SL”, with CIF number B-**.
CERTIFIES
That the failure to file the annual accounts of “***, SL” corresponding to the financial years *** in the commercial register is due to the fact that they have not been approved by the General Meeting for *** (the cause that motivated this can be stated, for example “differences between the partners that have prevented a sufficient majority”.
As a result of this and in accordance with article 378.5 of the commercial registry regulations and the interpretation thereof made by the General Directorate of Registries and Notaries, among others, in the resolution dated October 3, 2005, the Commercial Registrar of ** is requested to proceed to lift the registry closure decreed by virtue of article 19.1 of the same regulations.
The administrator.
In *** to **”
With this I do not want to encourage companies to fail to comply with the obligations to which they are subject, and the obligations that directors have towards partners for failure to fulfill their duties, and the responsibilities towards third parties that they may assume for failure to comply with the obligation to prepare annual accounts, must be remembered.
That is to say, we only provide information about a way to help societies, which we are often forced to do.
In Lleida on October 12, 2015.
