The possibility of designating a Foreign Director is one of the most pertinent questions for foreign individuals and companies intending to develop a business via a capital company in Spain.
Company law and corporate governance refer to the appropriate company management and control structures as well as the rules which regulate the power relation between owner, administration board, etc. Its function is to protect the interests of the company and its shareholders and to eliminate, mitigate or resolve any conflict.
The Spanish Companies Act stipulates some actions to protect the rights of minority shareholders to ensure the continuity of the company.
Law 5/2021, dated 12 April, which amends the Revised Text of the Spanish Capital Companies Act, introduces the possibility of holding general shareholders’ meetings exclusively through telematic means.
The Board of Directors may appoint from its members a managing director and delegate to him all powers permitted by law. The following article describes the appointment procedure and details his or her powers according to Spanish law.
Spanish capital companies must submit their annual accounts to the General Meeting for approval and file them before the Commercial Registry. The entry into force of RD 2/2021 on 1/2/2021 opens the door to apply the sanction regime for failure to do so in due time.
The Cash Pooling agreement facilitates the financial operations of companies, especially when operating in different countries. It allows a daily set of automatic inter-company loans to optimize the group’s global position, obtaining a single balance for each bank with which it operates.
The remuneration of directors of a Spanish company is deductible from the corporate income tax. However, the company’s bylaws must expressly contemplate the remunerated character of the post, and the remuneration scheme used to pay the director must be determined with certainty.
The growing relevance of companies, their partners, and administrators as economic actors has also introduced the proliferation of corporate crimes such as false accounting, abusive and harmful agreements, or the denial of corporate rights.
Non-refundable contributions are an effective and immediate mechanism for injecting funds into a company. Its purpose may be to solve the company’s financial imbalance, provide liquidity to the company or undertake a specific project. Unlike capital increases, non-refundable contributions do not require formalization in a public deed, nor registration with the Commercial Registry.
At the end of the fiscal year, the administrators of the company are responsible for preparing the annual accounts, convene an ordinary general meeting to approve them and deposit the accounts at the Commercial Registry.