Shelf Companies in Spain
The establishment and registration of a company in the Spanish Commercial Registry requires compliance with various formalities and often takes a long time, sometimes more time than the founders of the company have available. To avoid this process as much as possible, in practice, the use of shelf companies is widespread.
Establishment of a shelf company
As a basic principle, it is possible to purchase a shelf company from service providers.
Shelf companies are companies which engage in no economic activity beyond their establishment process. They are set up solely for storage purposes as “empty shells”. They do not take on a business; instead they purely manage their own assets.
The difference between a shelf company and a shell company is that a shell company was economically active in the past, but has since ceased its activity for whatever reason, but never liquidated or was removed from the Commercial Registry.
Formalities at Company incorporation
To compare, the establishment formalities are initially those of incorporation. Two of the most commonly created companies are the limited liability company (S.L.) and the public limited company (S.A.).
Choosing a company name
The first step is choosing a company name through the solicitation of a negative clearance in the Spanish Commercial Registry and reservation of the name.
Drafting of the bylaws
Subsequently, the development and design of the bylaws follows. The required founding capital must be paid at the time of creation.
Opening a bank account and applications for Spanish tax numbers
Later, the establishment of a bank account in the name of the created company, the application for a Spanish tax number for the shareholder (NIE) and the application of the tax number of the company (CIF).
Management, administrators and shareholders’ meeting
The management of the company is up to the administrators, who are appointed by the shareholders’ meeting and take over the legal representation of the company in legal transactions. Moreover, the formation of a company requires at least one partner.
The formation of the company also requires notarial authentication.
Legal capacity through entry in the Commercial Registry
The full legal capacity of the company is acquired only through the entry into the Commercial Registry. The effect of capital liability occurs only from that date.
Generally, it can take between 6-8 weeks until a definitive commercial registration.
Establishing a shelf company
At the time of the purchase of a shelf company, it is already registered in the Commercial Registry– usually with the statutory minimum share capital – and possesses a tax number and standard bylaws.
Acquisition and transfer of all shares
In order to use the shelf company, it is necessary to acquire all of its shares and transfer them to itself.
Amending the Bylaws and adapting the business purpose
Afterwards, the bylaws must be changed and adapted to the particular business purpose and the management must be replaced.
Disclose activation to the Registry Court
The activation of a shelf company must be disclosed as an economic re-establishment to the Spanish Registry Court.
The purchase of a shelf company (enlace al 79 2015) can be completed in less than 24 hours.
Catharina Jung & Karl H. Lincke
This article is not considered as legal advice