What it takes to keep a Spanish company running year to year

Terms used

• Registro Mercantil — The Registro Mercantil is the public commercial registry where Spanish companies deposit accounts and legalise their books.
• Libro diario — The libro diario is the journal where the company records each accounting transaction in date order.
• Libro de inventarios y cuentas anuales — The libro de inventarios y cuentas anuales is the book holding the company's inventories and its annual accounts.
• Libro de actas — The libro de actas is the minute book recording the decisions of shareholders' meetings and the administrators.
• Libro registro de socios — The libro registro de socios is the register listing the company's shareholders and their holdings.

Key rules

• Book legalisation: Legalisation of the books comes first in the calendar, before the accounts meeting.
• Deposit clock: The deposit month starts on the day the meeting approves the accounts.
• Meeting scope: The ordinary meeting approves the accounts, the management and the profit allocation, not only the accounts.
• Longer retention: Tax or other rules can require keeping records longer than the standard period.

The yearly cycle at a glance

A Spanish SL repeats the same steps every year. The dates below are for a company whose financial year is the calendar year. If your year-end differs, count the same periods from your own year-end.

1. Administrators draw up and sign the accounts.
2. The shareholders hold the ordinary meeting and approve them.
3. The approved accounts are deposited at the Registro Mercantil.
4. The books are legalised electronically at the Registro Mercantil.
5. You keep the books and supporting records.

The timeline below shows the order and the deadlines.

Step 1: Administrators formulate the accounts

The administrators must draw up and sign the annual accounts within three months of the financial year-end, which is 31 March for a calendar-year company. Three documents are prepared together: the annual accounts, the management report and a proposal for how to allocate the profit or loss.

All administrators sign. If a signature is missing, the document must say why.

Step 2: The ordinary meeting approves them

The shareholders' meeting must approve the annual accounts within six months of the year-end, which is 30 June for a calendar-year company. This is the ordinary meeting. It does three things: it approves the accounts, approves how the administrators ran the company, and decides what happens to the profit or loss.

Call the meeting in good time, so it can take place before the deadline.

Some decisions always need the shareholders, not just the administrators. These include appointing or removing administrators, changing the bylaws, increasing or reducing capital, merging, splitting or dissolving the company, and buying or selling essential assets (more than 25% of the company's assets). The FAQ below covers this.

Step 3: Deposit the accounts

The approved accounts must be deposited in the Registro Mercantil within one month of the approval date. The month runs from the day of the meeting, not from the year-end. If you approve on the last possible day, 30 June, the deposit falls at the end of July.

Step 4: Legalise the books

The books must be legalised electronically at the Registro Mercantil within four months of the year-end, which is 30 April for a calendar-year company. Note that this deadline comes before the accounts meeting. Four books are legalised: the libro diario, the libro de inventarios y cuentas anuales, the libro de actas and the libro registro de socios. The accounting books go in as digital files. The minute book and the members' register are also filed electronically.

Step 5: Keep the records

Keep the books and supporting records for six years from the last entry in the books. Tax, social security or anti-money-laundering rules can require longer. Tax limitation is normally four years, but records may be needed longer, so ask your accountant before discarding anything.

Timeline and deadlines

The yearly cycle for a calendar-year company

• Call the shareholders' meeting: at least 15 days before the meeting is held

Frequently asked questions

Which decisions can the administrators not take without the shareholders' meeting?

The shareholders' meeting alone decides a set of reserved matters, including approving the accounts and profit allocation, appointing or removing administrators and auditors, and changing the bylaws. It also decides capital increases or reductions, mergers, splits, dissolution and moving the registered office abroad. Buying or selling essential assets, meaning more than 25% of the company's assets, also needs the meeting.

Does the ordinary annual meeting only approve the accounts?

No, the ordinary annual meeting also approves how the administrators ran the company and decides what happens to the profit or loss. It must be held within the first six months after the year-end.

Which books do I have to legalise at the Registro Mercantil?

You must legalise four books: the libro diario (daily journal), the libro de inventarios y cuentas anuales (inventory and annual accounts book), the libro de actas (minute book) and the libro registro de socios (shareholder register). Accounting books go in as digital files, and the minute book and shareholder register are also filed electronically.

Can I throw away old records after six years?

Not always, because tax, social security or anti-money-laundering rules can require you to keep records longer. Tax limitation is normally four years, but records may be needed beyond that. Check with your gestor before destroying anything.