Spanish law allows the existence of unipersonal companies, which are those that have a sole shareholder.
This circumstance can occur from the moment of the incorporation of the company or can occur later on, when for example the shares of two or more shareholders are acquired by one of them who becomes the sole owner of all the shares.
When a company is a unipersonal, whether from its incorporation or later on, some measures to be adopted must be taken into account in order to avoid certain negative consequences foreseen by Spanish legislation.
The obligations to take into account are the following:
- Public notice of the
unipersonality: It must be documented in a public deed and
registered at the Commercial Registry, indicating the identity of
the sole shareholder.
- Infringement: the sole shareholder will have personal, unlimited, joint and several liability for the debts contracted during the period of unipersonality if 6 months have elapsed since this circumstance without the sole shareholder having been registered at the Commercial Registry.
- Documentation: the condition of unipersonality must be indicated in all company documents. This includes invoices, purchase orders, correspondence, contracts, etc.
- Official Contracts Book: the contracts signed between the company and the sole shareholder must be transcribed in a Official Contracts Book that has to be legalized in accordance with the provisions of the Minute Books.
- Annual Report: in
the Annual Accounts Report, express and individual reference will
be made to these contracts, indicating their nature and conditions.
- Infringement: in the case of insolvency proceedings of the company or of the sole shareholder, contracts that have not been transcribed to the Registry Book and are not referenced in the Annual Report will not be enforceable.
Finally, in relation to the contracts between the sole shareholder and the company, it must be borne in mind that for a period of two years from the date of the contract, the sole partner will be liable to the company for the advantages he or she has obtained to the detriment of the company as a result of the contract.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.