Law 14/2013 Entrepreneurs Law introduces a number of new developments relative to corporate formalities, which facilitate the beginning of entrepreneurial activity in Spain:
The Points of Attention to the Entrepreneur (PAE)
These are electronic or on-site windows (in physical offices or internet portals) where an entrepreneur can complete each of the procedures necessary for the initiation, exercise and termination of a business activity. In regards to internet portals, the Information Centre and Business Creation Network (CIRCE) electronic processing system will be used. The CIRCE must process the Single Electronic Document (DUE). At least one electronic Point of Attention to the Entrepreneur is guaranteed in the Ministry of Industry, Energy and Tourism. Notaries are identified as possible PAEs. The previous PAPL, or Points of Assessment and Procedure Launch will be integrated into the PAE.
- The PAE of the Ministry of Industry, Energy and Tourism shall, in all circumstances, include all the information and forms needed for access to the activity in question; the possibility to submit all the necessary documentation and applications; information on the status of processing procedures; all information on grants, subsidies and other financial support from the State, Autonomous Community and local authorities; and other functions that are attributed by law
- The formalities for the registration of a Limited Liability Entrepreneurship may be made with the CIRCE electronic processing system and the DUE. The Commercial Registry has six working hours after receiving the documentation from the PAE to submit the information to the Tax and Land Registries. From there, the appropriate authorities will have six working hours to begin the immunity from seizure registration for professional and business domicile debts.
Constitution of a company by public deed
The Law also provides that the founders of a limited liability company may opt for the constitution of the company by public deed with standardized bylaws, the contents which will be developed by regulations, meaning that the company will also be able to opt for filling a hard or electronic copy of the articles of incorporation with the Commercial Registry.
- The process is initiated at a PAE, by completing the DUE, providing a copy of the bylaws, requesting the exclusive name use from the Central Commercial Registry with up to five alternative names, and setting up the date of execution of the deed of constitution. The date and time of the deed of constitution cannot exceed twelve business hours after the electronic processing starts. The Central Commercial Registry will have six working hours to issue a positive or negative response regarding the company name
- The notary will authorize the bylaws by granting a document certifying that the capital was deposited (which is not necessary if the founders manifested in writing to be jointly responsible for the contribution) and electronically submit it through the CIRCE system to the Commercial Registry and the Tax Agency, which will issue a temporary NIF
- The Commercial Registry will send the certification of registration to the CIRCE within six working hours and request a permanent NIF
- Finally, the competent tax authority will electronically notify the CIRCE of the permanent NIF
- The founders may give the authorizing notary the ability to electronically submit and correct possible qualification errors pointed out by the registry. The PAE will submit information contained in the DUE to the tax authority, the General Treasury of the Social Security, and if necessary, to the local and regional authorities in order to request permits or licenses needed for the launch of the company.
Incorporation of a limited liability company using the DUE and the CIRCE systems without using their model bylaws
In these cases, the Law provides for a regime similar to the previous for the constitution of a limited liability company with standard bylaws, in order to successfully complete the initial registration of the company in which the Commercial Registry will exclusively report the basic information of the company (name, address, social objective, share capital, and organ of administration selected). After this step, the provisions of the Capital Corporation Law and the articles of incorporation of the company’s constitution will govern the company. The company will then have to meet the qualification requirements for final registration.
Discharge and onset of the activity of individual entrepreneurs and commercial corporations
The Entrepreneurs Law also recognizes the possibility of using the DUE for completing the formalities necessary for the discharge and onset of the activity of individual entrepreneurs and commercial corporations. Thus, from a PAE, all necessary data will be collected in the DUE to register the data in the Social Security System, including the census declaration of commencement of activity and, if applicable, the notice establishing a workplace. Simultaneously with the requests, the CIRCE system will electronically forward, as instructed by the application, the notice of commencement of activity, the pertinent declaration, or authorization or license request to the Autonomous Community or the City Council where the employer is to be established.
- Once the responsible City Council authority receives the declaration of the start of the business activity or the municipal authorization or license, the PAE will inform the entrepreneur of the completion of the procedures required for the onset of the activity in question. With the request for initiation of proceedings, the employer must pay any required fees
- During the exercise of the activity, the entrepreneur may perform, through the PAEs, any other pertinent formalities associated with the development of the activity before local and regional government authorities. This does not apply to tax, Social Security and public procurements or applications for grants and aids
- The Entrepreneurs Law also provides that natural persons and legal entities may electronically carry-out, through PAEs, all the administrative procedures necessary for the cessation of the activity of individual entrepreneurs, and cessation of and closing of the activities of commercial companies.
This article is not considered as legal advice