0. Introduction.

Sometimes, a company is constituted in a certain year, but the registration of the constitution in the Companies House takes place in the following year. This situation is common when the company is set up at the end of the year, so that the registration takes place already in the following year. It can also happen when, despite the fact that the constitution does not take place at the end of the year, the registrar negatively qualifies the documentation of the constitution and the interested party –or the notary authorizing the deed of constitution– appeals the registration qualification and the General Directorate revokes the qualification note of the registrar and the inscription is finally ordered. All this takes time and, although the company had been created in the middle of the year, it may happen that its registration takes place the following year.

In these cases, the question arises as to whether the company must submit its annual accounts for the year in which it was set up or whether, on the contrary, the first annual accounts deposited must be those for the year that the company was registered in the Companies House.

Regarding this case, the General Directorate for Legal Security and Public Faith has resolved two recent appeals, both dated October 19, 2020 (BOE November 4, 2020), in which it has decreed that the annual accounts of the accounting year of the constitution of the company, although its registration took place the year following its constitution.

1. Constitution of a company in one certain year and registration of the following year.

Both resolutions dated October 19, 2020, mentioned above, refer to two similar cases, so we will reproduce the details of the first one.

It is a company that was set up on December 27, 2018, indicating in its bylaws that the company would start its operations the day after the granting of its deed of constitution. Said deed was presented to the Companies House in Madrid on January 3, 2019 and was registered on the 17th of the same month.

The company did not submit the 2018 annual accounts for deposit and, when presenting those for 2019, the companies house register negatively rated the documentation, agreeing not to deposit the 2019 annual accounts because the 2018 annual accounts had not been deposited. So that the Companies House sheet of this company was temporarily closed until the aforementioned deposit of the 2018 accounts was made.

Against this qualification note, the company filed the pertinent appeal stating, in summary, that the company could not have carried out any operation until the deed of constitution was fully registered and that, furthermore, its registration in the Tax Authorities registries was not submitted until September 21, 2019.

2. Resolution of the General Directorate on the obligation to deposit the annual accounts.

The General Directorate resolved both appeals stating that, as said this General Directorate had previously ruled, and as the Supreme Court has also declared, it cannot be said that a non-registered commercial company lacks legal personality. In fact, it follows from certain legal precepts that commercial companies in formation and irregular companies too, have legal personality, sufficient to acquire and possess goods of all kinds, as well as to contract obligations and exercise actions.

Registration in the Companies House is only necessary for the company to acquire “its” special legal personality –this special legal personality should be understood as the one that corresponds to the chosen social type, and not to the legal personality in the abstract–, as determined by article 33 of the Capital Companies Law, which adds the limitation of the liability of the partners, and to exclude the joint and several liability of the administrators together with that of the company itself, as established in article 120 of the Commercial Code. On the other hand, the existence of the company not registered as a “company” also results from article 39 of the Capital Companies Act, which determines the application of the rules of civil society or collective society, depending on its purpose.

The law allows the date of commencement of corporate operations to be after the date of constitution, according to article 24 of the Capital Companies Law. However, the law does not allow the date of commencement of operations to be suspended at the will of the company or its shareholders in order to comply with a legal obligation such as the deposit of the annual accounts.

Therefore, the General Management resolved in both appeals that, having constituted the company on December 27, 2018 –the company corresponding to the other appeal was set up on December 17, 2018– and given that the beginning of the operations took place according to the statutes on the same day of its constitution, the company must present the annual accounts for the 2018 financial year, even if it has not carried out any operation, in which case, the content of the accounts will be adjusted to this circumstance of absence of operations, but they must be deposited in accordance with what is ordered by law.

3. How the obligation to present accounts can be avoided in this case.

The obligation to deposit the annual accounts for the year of creation of the company can be avoided by indicating in the bylaws that the start of operations will take place the year after its constitution.

That is, if a commercial company is to be set up on December 27, as is the case of the company whose appeal is the subject of this article, and no operation is expected to be carried out within the year of constitution, the easiest way to avoid the obligation to deposit annual accounts for the five remaining days of the year is that the partners establish in the bylaws that the start of operations will take place on January 1 of the year following the constitution. This is the way to avoid said obligation. However, we must warn that the calendar year and the accounting year do not have to coincide, so we have indicated this example in the case of coincidence; in the event that the partners decide that the calendar year and the accounting year do not coincide, the start of operations must take place on the day of the beginning of the accounting year, otherwise this statutory provision will have served nothing.

4. Frequently asked questions about the obligation to deposit annual accounts for a few days from the constitution.

Should the annual accounts be deposited or presented in the year of constitution when the company has been registered in the year following its creation?

Yes, it is mandatory to deposit the annual accounts, provided that the start of operations takes place on the day of constitution. If the start of operations is established for the following year, it will not be necessary to submit the annual accounts for the year in which the company was set up for deposit.

And if the company has not carried out any operation, is it also required to present the annual accounts?

Yes. Even if the company has not carried out any operation, even if it has not been registered with the Tax Authorities, it must submit the annual accounts.

Does the constituted but not registered company have legal personality?

Yes, indeed, it has legal personality. It is an abstract legal personality, since it corresponds to the legal personality of the chosen social type; that is, the legal personality of the civil society, the limited liability company, the public limited company, the limited partnership by shares, the limited labour company, etc.

So, how does the registration of the company change the legal personality?

The registration of the company in the Companies House confers on it the particular characteristics of the company type. For example, in the limited liability company, which is the most common today, the liability of the partners is limited to the amount of share capital. If the partnership is not registered, the liability of the partners is not limited. This phenomenon is known by the name of irregular society, which is one that has not been registered in the Companies House and its main characteristic is the unlimited liability of the partners.

How can the obligation to deposit the annual accounts of the year of the constitution of the company be avoided?

This obligation to deposit the annual accounts can be avoided provided that the partners agree in the bylaws that the commencement of the company’s operations will take place at the beginning of the next year –or accounting year, if the calendar year and accounting year do not coincide–. In this way, the company will not have to submit its annual accounts for the year of constitution, but will deposit the accounts for the fiscal year from which the operations began.