The Deposit of Annual Accounts in Spain

Companies in Spain have a period of three months for the preparation of the annual accounts and a period of six months for their approval by the General Meeting of Shareholders. The annual accounts must be deposited at the Mercantile Registry during the month following the Shareholders’ General Meeting.

Obligations of the administrators

In accordance with the Capital Companies Act, the administrators of the company are responsible for preparing the annual accounts (within a maximum period of three months from the closing of the fiscal year).

Also among their obligations is to convene the ordinary general meeting (in the first six months of each financial year) in order to approve the annual accounts of the previous fiscal year, to censor the social management and to ecide on the application of the profit or loss of the fiscal year.

Finally, they must comply with the obligation to deposit the annual accounts at the Mercantile Registry in which the company is registered.

Failure to deposit annual accounts on time

In the event of failure to comply with its obligation to deposit the annual accounts in due time at the Commercial Register:

• The company will not be able to register in the Commercial Register the appointment of administrators nor to grant powers of attorney
• The closing of the registry will prevent third parties from knowing the financial situation of the company, which will lead to the presumption of economic or management complications
• The company may be subject to administrative sanctions:
  • From €1,200 to €60,000
  • Up to 300,000 €/year when the annual turnover of the company, where applicable, of the group of companies, exceeds 6,000,000 €
• The liability for the damages shall fall on the administrator
• The liability for debts of the administrator, in case the company is in a situation of insolvency, will be considered as a case of culpable bankruptcy
• When established that there is legal cause for the company to be dissolved and the administrators do not act diligently within two months, they will have to respond jointly and severally with their own assets for the debts of the company, i.e. the limited liability will be lost.

However, if the annual accounts have not been deposited because they have not been approved by the General Meeting, the closing of the registry may be avoided, provided that this circumstance can be proven by certification of the administrative body expressing the cause of the lack of approval. If such cause persists in time, the certificate must be submitted every 6 months.

For further information regarding the deposit of annual accounts in Spain,