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El blog de Maria

Your daily Spanish Law reporter. Have it with a cafe con leche. www.costaluzlawyers.es

Legal tip 123. To form a company in 24 hours?
14 August 2009 @ 11:25

"In Spain it is possible establish a company through telematic means in 24 hours in a Notary office". "The Notary has the technological tools to provide this service, without sacrificing any of the legal security ", said Antonio Ojeda, President of the General Council of Notaries, at the closing of the seminar "Building companies” that took place in Universidad Internacional Menéndez Pelayo, Santander.

Ojeda pointed out that establishment and setting to operation of the company are two different concepts:

1 .- Constitution ( establishment) means creating the necessary legal entity
2 .- Setting to operation comprises a number of  administrative, local and regional licenses in the vast majority - without which it is not possible the start of economic activity.

 
Establishment:
  Regarding the first phase (establishment), it is possible to electronically obtain from a Notary office in Spain:
 
1. - The reservation of the company name - almost 10,000 names were reserved last year.
 
2. - The provisional Tax Identification Number (around 35,000 provisional Tax Numbers were obtained in 2008)
 
3.-To draft the deeds and the statutes, sending them electronically to the provincial trade register.
 
4.-In certain communities, to pay the corresponding  tax on the same day.
 
 All this can be done in just twenty-four hours or at most in two days, including the time it takes for the Central Commercial Registry to issue the reservation of the name.
 
For Antonio Ojeda, "The delay in the establishment of companies in Spain is due to instances such as Registration and winding up of taxes, currently decentralized in Spain in relation to tax corporate operations. The registrar still has an inordinate time-fifteen working days - for the approval of a business which has been previously screened by a public official, such as the Notary. Also, the Provincial Registrar needs to inform the Central Trade Register, within the three days immediately after the registration of the act or transaction, all the data business registered for publication in the BORME. (Official Gazette).
 
In other countries of Europe there is no duplication of controls, so, just one on legality at the time that the partners give their consent to form a society. In these countries, the document which has been electronically pre-controlled is deposited in a single central business register. The transfer of this model to Spain would turn the system into a much  simpler and cheaper one as the public official who can perform all these steps by telematic means already exists and is called “Notario”.
 
A solicitor or any person trained in Administrative burocracy will be needed for the rest of the requirements.  It is advisable though to use a lawyer with Administrative Law formation who will be able to overcome possible pitfalls or administative errors.
 
Menorca ( Islas Baleares) sunshade by peamasher at Flickr.com
 


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2 Comments


costas said:
14 August 2009 @ 12:29

Hi Maria,
This sentence says it all:
"A solicitor or any person trained in Administrative burocracy will be needed for the rest of the requirements. It is advisable though to use a lawyer with Administrative Law formation who will be able to overcome possible pitfalls or administative errors"

With all due respect, it is not practically possible to have a company formed within 24 weeks, let alone 24 hours. I understand that you are making it clear that it is the theory using the Notario, but the very fact that a Notario is needed (when he/she is not at breakfast, documents are *all* available and you don't have to go back 13 times) is already showing how unproductive the system is.

I am not British, I am greek and that qualifies me to know inefficiency when I see it! :-) We have plenty back home. But I lived in Britain for 12 years, and I have formed a company there in 48 hours. That was in 1995, it's even easier now with the internet. There was a list of documents required (so that you have it all first time! Unheard of here), a fee to pay by cheque, and memorandum of association (a template was included to make it easy for people). No lawyer. No costs. I've tried the same here - I don't need to explain what a hassle that was, you know already.

I'm not being nasty, I am just pointing out that, an an independent foreigner, this country does NOT encourage entrepreneurs AT ALL. And therefore cannot advance with the situation as is.

So, it's nice for the Official Gazette to explain why there may be delays in establishing a company.... but that is no good to anyone - they shouldn't be there at all!!


Maria said:
14 August 2009 @ 13:39

Hi Costas!
What the article is trying to show is that the President of the General Council of Lawyers think that with the telematic means now available to Notaries, they can establish ( legally make the legal entity born) within 24-48 hours.

A different thing is that once the Baby is born, he/she needs the required registration, controls, tax recording.... that...no doubt needs to be made by an efficient paperwork manager, which if also is a lawyer with a good training in fighting against the Administration better than better.

Good to read you!

Maria


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