Accreditation of social contributions.

Less than a year ago, Article 62^nd of the Consolidated Text of the Spanish Companies Law (“SCL”) was amended, introducing a new section, the current section 2, which has been integrated into the article on the basis of section 1 of Article 2 of Act 11/2018 of December the 28^th, which amends the Commercial Code, the Consolidated Text of the Spanish Companies Law and Act 22/2015 of July the 20^th on the Auditing of Accounts, with regard to non-financial information and diversity. This new paragraph was published in the Official State Gazette on December the 29^th of 2018, coming into force on December the 30^th of 2018, and consists on the following:

Article 62. Accreditation of the reality of the contributions.

1. Before the notary authorising the deed of incorporation or execution of the increase in share capital or, in the case of public limited companies, those deeds which record the successive payments, the reality of the monetary contributions must be accredited by means of certification of the deposit of the corresponding amounts in an account under the name of the company opened in any financial institution and which the notary will incorporate into the deed, or by means of its delivery so that the notary can constitute the same in the name of the company.
2. Notwithstanding the foregoing, it will not be necessary to prove the reality of the monetary contributions in the incorporation of limited liability companies if the founders state in the deed that they will be jointly and severally liable to the company and to the company’s creditors for the reality of the contributions.
3. The certification will be valid for two months from its date.
4. Until the period of validity of the certificate expires, the cancellation of the deposit by the person who made it will require the previous return of the certificate to the issuing credit institution.

In accordance with the wording of the article -which is confined to limited liability companies (“S.L.”)-, when a company is incorporated or when its capital is increased, the accreditation and incorporation in a deed of the bank deposit certificate that proves the payment of the monetary amounts allocated to the capital in the company’s bank account -which up to now was needed in any case as required by the first section of the amended article – may be dispensed if this requirement is replaced by an express statement, reflected in a public deed, whereby the shareholders become jointly and severally liable for the existence of the company’s contributions, both to the company itself and to the company’s creditors.

It is clear that, by including this section in Article 62^nd of the SCL, the legislator is once again seeking to simplify the procedures and to provide greater flexibility in the company system, making the scheme for making cash contributions similar to that established for non-cash contributions described in Article 73^rd of the same legal text:

Article 73^rd. Joint and several liability.

1. The founders, the persons who were shareholders at the time the increase in capital was agreed and those who acquire a share paid in by means of non-monetary contributions, shall be jointly and severally liable to the company and to the company’s creditors for the existence of those contributions and for the value attributed to them in the deed. The liability of the founders shall extend to the persons on whose behalf they have acted.
2. If the contribution has been made in exchange for an increase in share capital, the shareholders who recorded in the minutes their opposition to the agreement or to the value attributed to the contribution will be exempt from this liability.
3. In the event of an increase in share capital at the cost of non-cash contributions, in addition to the persons referred to in section one, the administrators will also be jointly liable for the difference between the valuation they have made and the actual value of the contributions.

Therefore, nowadays it is not necessary for the notary who authorised the deed of incorporation or the capital increase to verify the existence of the monetary contributions made by means of the exhibition by the founding members of a certificate issued by the bank where the company had its bank account, it being possible to replace that certificate with a prompt declaration made by the shareholders stating that they had made such contributions. It is important to emphasize that this modification is exclusively applicable to “S.L.’s” (this ism Spanish Limited Liability Companies) and, therefore, the rest of the legal corporate forms do not have this option and must continue to use the previous system.

This flexibility seems reasonable, especially since it does not involve a greater risk than that already undertaken in practice with the bank certificate, which did not provide an effective guarantee of maintaining the share capital in the bank account throughout the company’s life. Moreover, with the commitment of the shareholders of being jointly and severally liable for this amount, noted in a public deed, the system gets an additional guarantee to that previously set, which will allow any creditors to go against the assets of the founding shareholders in the event of default, without having to go against the company’s assets beforehand. For this reason, it must be carefully assessed whether it is advisable to make use of this new option, especially in those cases where the share capital in question involves the investment of large amounts of money.

By way of conclusion, in order to avoid the need of showing the above-mentioned bank certificate in an S.L., it will be sufficient to include in the corresponding deed, after the description of the monetary contributions, a paragraph similar to that set out below:

“De conformidad con lo establecido en el artículo 62.2 de la vigente Ley de Sociedades de Capital, los socios (fundadores) hacen constar que responderán solidariamente frente a la sociedad y frente a los acreedores sociales de la realidad de estas aportaciones dinerarias”.

“In accordance with the provisions of article 62.2 of the current Companies Law, the (founding) shareholders state that they will be jointly and severally liable to the company and to the company’s creditors for the existence of these monetary contributions”.

María Roldán