New system for the legalization of mandatory company books by telematic means

The Directorate General for Registers and Notaries, in its Order of 12 February 2015, analyses and unifies the criteria regarding the new system for the legalization of company books by telematic means. Such system was introduced by Law 14/2013 of 27 September on support of entrepreneurs and their internationalisation.

The implications of this new system for the legalization of books are both significant and diverse. With the aim of clarifying the steps that must be followed for the legalization of the company’s books by electronic and telematics means, below we expose and analyse the main features of this system as well as the principles and criteria introduced by Order of 12 February 2015 (the “Order“).

• The new system of legalization of books by telematic means is applicable to all kind of books (i.e. accounting books, books of minutes, shareholders’ registry books, etc.) corresponding to year 2014 and the subsequent years. As an exception, and only for those books corresponding to year 2014, registrars may accept them in paper format if they could not be filed for their legalization by telematic means due to a just cause. The concept of “just cause” has not been defined in the Order and, thus, we anticipate this concept will be broadly interpreted by registrars.

• The books shall be filed in electronic format and be sent by telematic means for their legalization within four months after the closing of the fiscal year. For example, a company that closes its fiscal year on 31 December will be able to file its books for legalization until 30 April of the following fiscal year before the Commercial Registry corresponding to its registered address.

• Regarding the shareholders’ registry book and the registered shares book, an initial book reflecting the shareholding of the founders will have to be legalized upon the incorporation of the company. Once this initial book is legalized, the legalization of a new book will not be mandatory until four months after the closing of the fiscal year, and only if there has been any alteration of the initial or successive shareholding or in the event that any encumbrances have been set up over the shares. These same rules apply to the book of contracts entered into by the sole shareholder and the company.

• It is important to point out that the legalization of books of minutes will be admitted regardless of the lack of legalization of the books corresponding to the preceding years. In this same sense, the shareholders’ registry book and the registered shares books may be legalized even if the initial book was not legalized.

• The books legalized in paper format shall be closed before proceeding to the first filing of books by telematic means. Such closing should be evidenced by means of a certification issued by the company’s administrative body, which will have to be sent together with the first electronic submission of books.

• Those companies that have not legalized any book of minutes, shareholders’ registry books, registered shares books or books of contracts entered into by the sole shareholder and the company since its incorporation may file by electronic means all corporate minutes and other corporate undertakings that are subject to legalization dating back to its incorporation.