For the first time in Spain it is possible to incorporate an SL completely online, without the need to appear before a notary in person. This is possible thanks to the transposition of European Union Directives, by which Law 12/2011, of 27 May, has been amended, a profound change that aims to digitalise notarial procedures, reducing timeframes.
Law 11/2023 of 8 May on the transposition of European Union Directives on the accessibility of certain products and services, migration of highly qualified persons, taxation and digitalisation of notarial and registry procedures, and amending Law 12/2011 of 27 May on civil liability for nuclear damage or damage caused by radioactive materials (hereinafter, “Law 11/2023“), introduced changes to the Capital Companies Act (“LSC“), granting the possibility of setting up limited liability companies (S. L.) by means of a completely online procedure, without the need for shareholders to appear in person before a notary, with certain exceptions[1].
Although this reform of the online incorporation of companies came into force on 10 May 2023, the reform of the Notaries Act, which makes the online incorporation system possible, with the granting of certificates by videoconference, does not come into force until six months later, until 9 November 2023.
Among the digital novelties introduced by Law 11/2023, we can highlight the following:
- Limited liability companies (S.L.) may be incorporated using the entirely online procedure, provided that the contributions are in cash.
- The documentation, valuation and transfer of cash contributions will be carried out electronically, with the notary being responsible, where necessary, for checking that the reality and, where appropriate, the valuation of the contributions have been accredited (without prejudice to the provisions of Article 62.2 LSC).
- There will be standardised articles of association and a standardised public deed, which will be included in the Single Electronic Document, in Spanish, co-official languages and English.
- The registration of the company in the Commercial Registry corresponding to the registered office, when standardised deeds with coded fields and standard articles of association are used, will be carried out within six working hours from the day following the date of the filing entry. In all other cases, the qualification and registration shall be carried out within five working days at the latest from the day following the date of the filing entry.
- The notary may issue authorised copies with his qualified electronic signature under the same conditions as paper copies, and the notary is obliged to keep computerised indexes of the notarised and executed deeds.
- Execution acts will be carried out by means of videoconferencing, through the application open in the notary’s electronic office, in which the notary and the user will appear using electronic identification systems. Various corporate deeds may be executed by means of these authentication procedures:
a) Commercial policies.
b) The incorporation of companies, appointments and powers of attorney of all kinds provided for in mercantile legislation, as well as the execution of any other corporate act, provided that, in the event that they contain contributions of the shareholders to the share capital, they are in cash. Any other corporate act is understood to mean: appointment of officers, resignations, powers of attorney, capital increases and reductions, amendments to the articles of association, changes of registered office, etc.
c) The granting and revocation of powers of attorney, except when they are general or preventive.
d) Letters of payment and cancellations of guarantees.
e) Minutes of general meetings and minutes of reference in the strict sense of the term.
f) testimonies of legitimisation of signatures.
g) The full online procedure also extends to the registration of branches.
- The Land Registry, Commercial Registry and Registrar of Movable Property will have a single, nationwide, general electronic site. Their registry decisions, certifications and, in general, any document to be signed by the registrar, as well as electronic entries, will be signed with their qualified electronic signature.
- The registration procedure shall be initiated by means of the presentation of the corresponding application in person or by telematic means at the Registry. In the same way, deeds subject to registration may be submitted on paper or electronically.
- Registrars may use videoconferencing systems for the exercise of their respective public functions.
As we have seen, the digital innovations introduced by Law 11/2023 represent a change in the current paradigm, with a definitive commitment to the digitalisation of notarial and registry proceedings.
It is expected that, with this digitalisation, the procedures will be speeded up, reducing both the time periods and trying to avoid physical appearances or transfers of the grantors.
The legislator’s attempt to move towards the creation of a dynamic and, to a certain extent, homogenised regulatory framework for company law in the European Union can be seen. Moreover, in keeping with one of the guiding principles of the European Union (freedom of movement and establishment), an attempt is being made to facilitate the procedure for the incorporation of companies and their branches.
Although we will have to wait a few months to be able to observe the first results of the operation of this new system of completely online incorporation of companies, as well as the granting of notarial acts telematically, we believe that this type of measure, in an attempt to provide facilities (with the consequent saving of bureaucratic procedures, time and costs) to potential investors who, for example, wish to start an activity, is a real success, which can contribute to the greater development of both national and foreign investment in our country.
[1] Although the founding shareholders are not required to appear in person before the notary in the case of an entirely online incorporation, for reasons of public interest and in order to avoid any falsification of identity, the notary may, for the purpose of verifying the exact identity of the founder, require the physical appearance of the interested party on a single occasion. The notary may also require this physical appearance in order to fully verify the capacity of the grantor and, where applicable, his actual powers of representation. In these cases, the notary must append the reasons for requiring the presence of the parties to the deed.
