Transfer of an undertaking: Registries and Notaries

Transfer of a company to another Member State

Royal Decree-Law 5/2023 of 28 June 2023 contains an overall regulation of all structural changes, i.e. transformation, merger, division, global transfer of assets and liabilities, both internally and within the EU or in relation to third countries.

Article 1 setting out the objective scope of the Law deals with structural changes, both internal and cross-border, involving the transformation, merger, division and overall disposal of assets and liabilities.

According to this, international transfer of domicile is now treated as a cross-border transformation rather than a structural change, and the scope of the Law is extended to all cross-border structural changes.

In any event, a cross-border transaction means:

1.- A Spanish capital company, without being wound up or liquidated and while retaining its legal personality, becomes a capital company of the Member State of destination, transferring at least its registered office to that State.

2.- A capital company registered in another Member State of origin, without being wound up or liquidated and while retaining its legal personality, becomes a Spanish capital company, transferring at least its registered office to Spain.

For the purposes of the required procedure, the general rules for all structural changes apply:

1. Submission of a structural change plan.
2. Preparation of a report by the management body.
3. Preparation of an independent expert report.
4. Advance notice of the agreement must be issued one month before the agreement date and on the website of the company or companies.
5. The notice must contain certain minimum particulars:
6. The next step is approval by the general meeting.
7. The structural change will be effective from the date of its registration in the commercial register.

In addition to the aforementioned general rules, the following special circumstances must be taken into account:

Certification prior to the structural change

The Commercial Registrar of the registered office of the Spanish company that is going to carry out or participate in a transaction where Spain is the State of origin is responsible for checking the legality of the transaction as regards the parts of the procedure that are subject to Spanish law and for issuing a pre-change certificate to prove that all the required conditions have been fulfilled and that all the necessary procedures and formalities have been correctly completed.

Legality check in the event of suspected illegality or fraud

The Commercial Registrar may request additional information if, as a result of the documentation and information submitted, there are reasonable grounds to suspect that the transaction in question is being carried out for illegal or fraudulent purposes, that it has the purpose or effect of circumventing EU or Spanish law, or that it serves criminal purposes.

Sending the pre-change certificate

The pre-change certificate will be shared with the authority designated by the Member State of destination as competent for checking the legality of the operation, through the registry network.

Checking the legality of the operation when Spain is the State of destination

Where the company created by the operation is subject to Spanish law, the commercial registrar must check the legality of the operation as regards implementation of the structural change and incorporation of the new company or companies or changes to the acquiring company before registration.

Lastly, a Spanish company can only be transformed to a company incorporated under the law of a State which does not form part of the European Economic Area if the law of that State allows it to do this and keep its legal personality.

Transformation of a foreign company into a Spanish company will not affect its legal personality if the law governing its personality allows it to keep that personality. The company must comply with Spanish legal requirements for the incorporation of the type of company in question, in particular by providing evidence by means of an independent expert's report that its net assets cover the amount of share capital stated in the articles of association, which must be at least the amount of share capital required by Spanish law.

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