Catalina Hernández-Gil
On May 8, 2023, the Spanish Congress definitively passed the Law for the transposition of the Directives of the European Union on the accessibility of certain products and services, migration of highly qualified persons, taxation, and digitalization of notarial and registry actions, which will allow the incorporation online of limited liability companies.
The Law for the digitalization of the procedures related to Notaries and Registrars was published on November 17, 2023. Said Law announced one of the most awaited changes in the Spanish legislation as far as Corporate Law is concerned, since it´s purpose is the transposition of the Directive (EU) 2019/1151 of the European Parliament and of the Council, of June 20, 2019, whose transposition deadline expired on August 1, 2021 (hereinafter “Directive (EU) 2019/1151”).
Directive (EU) 2019/1151 is focused on the implementation of digital procedures for the acceleration of the digital transformation of the Public Administrations. The Commission has emphasized on numerous occasions the importance of the role of Public Administrations in helping companies to start their activities, operate online and expand across borders (Commission communications “A Strategy for Europe´s Digital Single Market” and “EU e-Government Action Plan” 2016-2020)
The unification of the digital procedures needed to start business activities in the European Union and the reduction of costs are key elements to ensure the efficiency and the security of the transactions between the Members of the EU attracting investors to the Union and fostering economic growth.
With regards to the incorporation of companies, the transposed Directive (EU) 2019/1151 does not establish a unique system for all EU countries but sets up some minimum requirements (the possibility of setting up a company without the need for physical presence) empowering Member States to require the participation of Notaries to fight fraud and business piracy and to offer guarantees.
Therefore, the objective from the perspective of Spanish Corporate Law was to create a system that allowed maintaining the security and usefulness of face-to-face action, now at a distance. In the case of Spain, the transposition of this Directive has meant a new digital challenge for Notaries and Registrars, specifically for the figure of the Notary, who assumes responsibility for the judgments made about the identity, capacity, and legitimacy of the grantors, the legality of the legal transaction, and the provision of free and informed consent.
The Law passed on May 8th introduces a key modification from the Notarial perspective: it enables the incorporation of limited liability companies online with cash contributions (which must be made by an electronic payment instrument) without the founders having to appear before a Notary unless required. Also, one of the most noteworthy amendments introduced is the possibility of authorizing the following deeds by videoconference, eliminating by EU imperative the requirement of physical presence (core of the notarial function in Spanish Law): incorporation of companies, appointments, authorizations and empowerments of all kinds, revocations of powers and testimonies of signature legitimacy, among many others.
Likewise, there will be standard bylaws and public deeds available for the founders in the co-official languages of Spain and in English leading to the optimization of the registration deadlines stablishing a deadline of six hours for the registration of companies incorporated using the standardized documents.
The modifications related to the Spanish Companies Law will enter into force on the day following its publication in the Official State Gazette and the modifications relating to the Notaries Law six months after said publication. It is expected that this law will improve the efficiency and speed of company creation, favoring a more agile and unified economic environment in the European Union.
XLNC ARCHIVE| 10 May 2023