Legal adviser: Which companies are obliged to appoint one?
The legal adviser to the administrative body is a figure regulated by Law 39/1975 of the 31st of October, still in force, whose function is to advise on due compliance with the legality of the adopted Agreements.
That said, and although it is applicable to any administrative body (sole administrator, several joint/solidary administrators and/or Board of Directors), not all companies are obliged to appoint a legal adviser. Thus, the aforementioned Law declares the following companies to be obliged to appoint a legal adviser:
1.- Those Spanish companies (understood as those which have their registered office in Spain according to art. 8 of the Capital Companies Act) in which some of the following three requirements are present:
-
Share capital over EUR 300,506.05.
-
Have a turnover of more than EUR 601,012.10, according to the last approved balance sheet.
-
If it has a permanent workforce of more than 50 employees.
2.- Companies with registered offices outside Spain that operate in our country, the appointment of a legal adviser is also required, provided that one of the last two requirements (turnover and number of employees) is fulfilled.
The legal adviser must be a registered professional practicing lawyer and the societies in which it can undertake such roles are limited to five companies.
Is it possible for one of the members of the Board to be appointed as legal adviser provided that it is a practising lawyer? The answer is yes, in accordance with Article 5 of Law 39/1975 of the 31st of October.
What are the consequences of the duty to appoint a legal adviser for companies obliged to have such a figure? Although no specific fine is established for non-compliance with the duty to appoint legal adviser, the Law establishes that it will be a subject matter for assessment in any director liability proceedings arising from the failure to comply with the legality of the Resolutions adopted by the administrative body.
Therefore, the failure to appoint legal adviser for the companies obliged to do so, could be susceptible of becoming an aggravating or probative element of the liability of directors in cases such as liability actions against directors, bankruptcy proceedings or in cases of criminal liability of the legal person (criminal compliance) for lack of due diligence in the exercise of the position.
Founding partner-CEO of Devesa & Calvo Abogados.