The Instruction of February 12, 2015, of the General Directorate of Registries and Notaries, on the legalization of business books in application of article 18 of Law 14/2013, of September 27, on support for entrepreneurs and their internationalization, contains two thousand three hundred and thirty-five words, not including annexes.
All this to explain an article that reads as follows::
- All books that entrepreneurs are required to keep pursuant to applicable legal provisions, including the minutes of meetings and other collegiate bodies, or the registers of partners and registered shares, shall be legalized electronically in the Commercial Registry after completion in electronic format and before four months have elapsed following the date of the closing of the financial year.
- Business owners may voluntarily legalise detailed books of minutes or groups of minutes drawn up with a frequency less than annual when it is of interest to reliably prove the fact and the date of their intervention by the Registrar.
- The Registrar will verify compliance with the formal requirements, as well as the regular successive training of those carried out within each class and will electronically certify his/her intervention, in which the corresponding validation code will be expressed.
That is to say, one hundred and forty-seven words need another two thousand three hundred and thirty-five for their correct understanding or application, and all of this in application of article 260 of the Mortgage Law, which in my opinion can only be supported by instruction and in any case being very lenient with the interpretation of the article in question, insofar as it empowers the General Directorate of Registries and Notaries to resolve any doubts that may arise for registrars regarding the understanding and execution of this Law or the Regulations, insofar as they do not require provisions of a general nature to be adopted by the Minister of Justice.
This whole question brings to mind a thing, which is the closing proposition of Wittgenstein's “Tractatus Logico-Philosophicus”, which says that “What cannot be spoken about must be kept silent.””, and in my opinion, the General Directorate of Registries and Notaries has overstepped its bounds with this instruction, which clearly has a directly normative content, and which not only clarifies but develops the normative provision that it seeks to clarify.
Having made this introduction, we will try to shed some light on the subject, at least in the more legal and non-technical-computer aspects of the matter, referring to the concept of telematic legalization that we have explained in another entry of this blog, which you can consult by clicking here
Since when has the electronic ledger system been in place?
The system will apply to all types of compulsory books for fiscal years opened after 29 September 2013, the date on which the law came into force. In other words, books bound in white and already legalised and not filled out will no longer be valid, as they may only be used for accounting, contracts and minutes of fiscal years opened before 29 September 2013.
What happens to old, white-bound and already legalized books??
Once this last fiscal year has ended, since the law came into force (29 September 2013), the normal date will be 31 December 2013, and the books will be closed by means of a document that will be certified in the first electronic transmission of said books, with the incorporation of a file that includes the certification of the administrative body that attests to said circumstance, all for the purposes of article 334.2 of the Commercial Registry Regulations and article 18.3 of Law 14/2013, of 27 September.
Where and when should legalization take place?
In the Commercial Registry competent by reason of the domicile after completion and within four months following the end of the financial year.
How many minute books are needed?
A single book may be used for the minutes of all the collegiate bodies of the society.
Can books be legalized before the end of the fiscal year?
There are no obstacles to this, because if someone wants to pay, the cash register will always be open and thus it is possible that at any time during the financial year, minute detail books can be legalized with minutes from the current financial year for evidentiary purposes or for any other purpose, without prejudice to the fact that these minutes are obligatorily included in the minute book for the entire financial year.
What happens to the already legalized blank register books of registered shares or partners?
The same applies to legalised blank books of collegiate bodies, which may only be used for legal transactions on shares or stocks entered into prior to 29 September 2013.
In these books, the instruction goes far beyond its functions, since it is not supported by either Law 14/2013 or the Capital Companies Law, which requires the nationality to be recorded.
Can the books of a fiscal year be legalized without having legalized those of previous fiscal years?
In this matter I believe that the author(s) of the instruction have had an attack of sanity, allowing the legalization of the minute books of a specific year without the previous one or years being legalized.
Likewise, companies, regardless of the date of their incorporation, that have not legalized their book of minutes, partners, registered shares or sole shareholder contracts with the company, at the time after the incorporation of the company, either in accordance with the previous legislation or that which is now being developed, and as it results from the registry files, may include in the first books of said classes presented electronically, all the minutes and events of the company from the date of its incorporation until the closing date.
Can the books of already legalized entrepreneurs be rectified electronically?
Yes, for which a file containing a certification from the administrative body notifying the error committed must be included in the corresponding file of the rectification submission, together with the rectified file containing the correct data.
What happens in case of loss?, theft, physical or computer destruction, or robbery of the membership books or registered shares?
A book containing the contents of books rendered unusable for any reason may be legalised, provided that the aforementioned facts are accredited by a police report or a notarial act. For these purposes, the act or the report must be included in a file attached to the request for the legalisation of the books.
What is the qualification of the Registrar of Business Books?
It has a double aspect: on the one hand, it must verify that the content of the legalized files and other documents submitted conform to the provisions of this Instruction, that is, to the technical requirements, which I imagine the computer program will automatically carry out.
The instruction does not say anything about legal qualification, so it will be necessary to adhere to the content of article 18 of the entrepreneurs' law, in the sense that the Registrar will verify the formal requirements, that is, those of article 97 of the Commercial Registry Regulations.
What is the evidentiary value of books?
We must start from two precepts, on the one hand, article 31 of the Commercial Code which says: “The probative value of the businessmen's books and other accounting documents will be assessed by the Courts in accordance with the general rules of law.; and on the other hand, article 327 of the Civil Procedure Law which states: “When merchants' books are to be used as evidence, the provisions of commercial laws shall apply. The court may, with justification and on an exceptional basis, request that the books or their computer support be produced before it, provided that the entries to be examined are specified..
That is to say, the books of entrepreneurs are private documents and have the value of private documents, and thus will constitute full proof in the process, in accordance with article 319, when their authenticity is not challenged by the party they harm.
What happens is that the circulation of this private document will take place, according to the twenty-second provision of the instruction, through a certification by the Registrar, who will certify that the identity of the content of the businessmen's books, with those that appear in the legalized books and all of this by reference to the entries made in the Legalization Book-File. That is to say, a system is established very similar to what the certifications of entries of the Commercial Brokers were, where a copy of the policy was presented for the purposes of execution, and the Broker certified that it was in accordance with what was recorded in his registry book.
Can other books be legalized?
There is no problem, but with one condition, they must be in accordance with the rules set out above.
Does the instruction apply exclusively to the books of companies?
No, because the rules we have outlined will also apply to the legalization of books of temporary business associations, property communities, associations of any kind, foundations or other natural or legal persons required to keep accounting records in accordance with the provisions of the Commercial Code.
FINALLY: My opinion on the instruction and the new system of legalization of books:
1.- There is a notable lack of legislative technique, since the subject matter affects laws as important as the Commercial Code and the Civil Procedure Law, and the Commercial Registry Regulations, but not a comma of these legal bodies is touched.
I understand that the draft Commercial Code does not regulate this issue of the telematic legalization of business books.
2.- The Instruction has a much broader content than the merely explanatory content that should correspond to it. With all due respect to the authors, but within my right to disagree, the instruction is more similar to a regulatory provision and, what seems more serious to me, it introduces issues that are not even provided for in the law, as is the case of the annulment of the previous minute books.
3.- The whole new system has a certain corporate smell, of taking advantage of the political moment to consolidate and gain professional positions. Quoting again from Wittgenstein's "Tractatus Logico-Philosophicus", "in logic nothing is accidental", so time will give and take away reasons for the specific purposes of this reform, and I hope I am wrong.
4.- A new annual cost is introduced for entrepreneurs. While until now, many companies could survive their entire existence with one or a few books, from now on this cost, which will start at 25 euros, becomes an annual cost, not counting the cost of advisors, which will significantly increase the bill.
5.- There will be a duplication of information, since the most important acts in the life of companies are already published through the corresponding registrations and this will raise problems due to divergences in content. In my daily professional work, practically the 99% of the social agreements are drawn up in the notary's office, through a small minute, sent by the company or the advisors. In other words, there is a filter that adapts the will of the company to the excessively detailed requirements established by the Regulations of the Commercial Registry, for the registration of social agreements. This system, which until now has worked quite effectively, is being replaced by a new one, which despite having a name that seems to claim modernity, in reality is more cumbersome and more expensive.
6.- I reiterate the need to be more careful from now on when drafting corporate agreements.
It is very common for certifications of social agreements to begin by saying “I CERTIFY: That the minutes of the company are recorded as follows: (…) Well, from now on, that phrase will be incorrect in most cases, because the minutes book is created a posteriori, once it is legalized.
It is also highly advisable to write the certifications verbatim and not in extract. With this we will ensure that the same work will serve to prepare the deeds and complete the minutes book, without the risk of discrepancies between them.. Of course, recording in the certification the content that must be circulated, because I must say that I was horrified a few days ago when I saw some social agreements, raised to public status based on a notarial act, in which all the misdeeds supposedly committed by the partners were recorded, totally unrelated to the content of the registrable agreements.
The difference between literal and abstract certification is determined by article 112 of the Commercial Registry Regulations, which establishes as a special peculiarity the lack of need to establish the list of attendees, it being sufficient to express the total capital represented by the shares or participations of the attending partners.
In Lleida on February 23, 2015.
