Requirements for registering the cessation in the Commercial Registry.
A recent ruling by the Provincial Court of Barcelona, issued on July 19, 2018, has dealt with the issue of registration in the Commercial Registry of the dismissal of a sole administrator when, together with the document proving the dismissal of the administrator, the data relating to the person who will occupy that position from that date onwards are not included.
It reviews the main considerations regarding this issue, which we will now summarize.
- The first consideration is that the resignation of a company director is a voluntary and free act, whose only requirement for its effectiveness is its due communication to the company.
- The acceptance of the resignation by the company is "obligatory and merely formal," and is equivalent to a simple notification, without the possibility of opposition by the company.
- The resignation is valid and effective when it has been duly notified to the company.
- However, in order to prevent the resignation of the administrator from causing a situation of social acephaly (absence of administrator), the Directorate General of Registries and Notaries requires, in order to register the resignation in the Commercial Registry, that the outgoing administrator extend his duties of diligence after his resignation, requiring him to carry out a specific task, the convening of a meeting to appoint a new company administrator.
- The duty of care required of the outgoing director is literally as follows: “It is reasonable to require them to formally convene a shareholders' meeting with the appointment of a new director as an agenda item, but not other ancillary obligations that are only applicable to a director who has not been removed, such as the obligation to provide information or to respond to shareholder requests and ensure the presence of a notary so that the meeting can be held in their presence.” These obligations of the outgoing director “cannot be interpreted broadly (…), but rather restrictively, as befits the exceptional nature of the situation.” As stated in the judgment, “the due diligence obligations of the outgoing administrator are limited to a minimum, which consists of simply convening the meeting to avoid a leadership vacuum. But from that point on, the company and its shareholders are solely responsible if the vacuum persists because they are unable to appoint a new administrator for whatever reason. Therefore, the outgoing administrator is responsible for taking the necessary steps to avoid a leadership vacuum, although not all means, but only those essential to prevent it.”
- With regard to the case under analysis, the judgment ultimately made the following consideration: “The administrator convened the meeting in a proper manner, allowing for the approval of the appointment of a new administrator. His responsibility ends thereafter; if, due to a subsequent action attributable to one of the partners—such as a request for the assistance of a notary—the validity of the agreement is called into question, this is not attributable to the dismissed administrator but, at most, to the company and its partners. Therefore, the relevant factor is not whether a valid agreement was reached, but whether it could have been reached given the administrator's proper convening of the meeting, which seems beyond question.”
In short, although the removal of a director becomes effective upon simple notification, to ensure its full legal force against third parties through registration in the Commercial Registry, the outgoing director must convene a shareholders' meeting, with the appointment of a new director included on the agenda. Compliance with this procedure will allow for the registration of the removal in the Commercial Registry.
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A graduate in Law from the University of Barcelona and with a Master's degree in Business Law from the same university, he worked at the law firm Alonso-Cuevillas Advocats and later joined the Civil and Commercial Litigation department of the law firm Bufete Bueno Bartrina. He then joined the team at the firm Casamitjana-Cuyas-Morales, and subsequently continued his career at Bufete Herrera Advocats, in the Commercial and Litigation department. In November 2015, he joined aÀmbitJurídic i Econòmic, SLP, as a professional partner, to head the Commercial and Insolvency practice.
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