The registered office of a company, its legal headquarters, is defined by Article 9 of the Spanish Corporate Enterprises Act (hereinafter: LSC) as the place where the actual administrative and management activities are found, or where the main business establishment or operation is located. In this regard, the registered offices of most Spanish companies are located at its sole centre of operations. However, there are some cases when companies have several relevant business centres and they must choose one of them, or it is necessary to change the main place of activity because of strategic planning or business reasons.
Traditionally, to move the legal headquarters and change of the registered office requires the amendment of the company’s bylaws, which the general meeting must approve. The main aim of the approval of the Law of 9/2016 (26 May 2016) on urgent measures in insolvency proceedings was to expedite this process. Accordingly, this Law modified the original version of Article 285.2 of the LSC, which already allowed the administrative body to agree on changing the registered office within the same municipal district, by extending this power to the whole national territory, if the company’s bylaws does not provide otherwise.
Following this modification, the article was drafted as follows: […] unless otherwise provided in the company’s bylaws, the administrative body shall be competent to change the registered office within the national territory.
However, this editing was the subject of many different doctrinal discussions. to understand some records that indicated that bylaws stating that the administrative body was competent to modify the registered office within the same municipal term did not sufficiently empower the administrative body to make this transfer to the national territory. For this reason, a statutory modification was necessary to establish this power with the subsequent holding of a general meeting. Nevertheless, this entailed a considerable delay in the process of changing the registered office.
In order to solve this situation, the 15/2017 Royal Decree-Law (6th of October) for urgent measures regarding the mobility of economic operators within the national territory has recently been approved. The Royal-Decree has a clearer and more unequivocal wording than article 285.2 of the LSC: the Administrative Body shall be competent to change the registered office within the national territory, unless otherwise provided in the bylaws, meaning that the bylaws expressly state that the administrative body does not have this competence.
In the case of a company that was established before the Royal Decree-Law entered into force, the Administrational Body has competence to move the legal headquarters within the national territory, unless a statutory amendment that expressly declares that the administrative body does not have the competency to change the registered office within the national territory, is approved.
Procedure to move legal headquarters
Once the change of the legal headquarters is agreed upon with the consequent amendment of the company’s bylaws, a notary shall be consulted to grant the corresponding public deed that indicates the new registered office of the company. This deed must be registered in the corresponding Mercantile Registry. In this regard, it is important to highlight that according to the Spanish Regulation of the Mercantile Registry, the transfer of the registered office from one province to another requires the public deed to be accompanied by a certificate of all the company´s registrations issued by the corresponding Mercantile Registry of origin, which will be literally reproduced by the Mercantile Registry of the new location. The Mercantile Registry of the new location will then inform the previous Mercantile Registry of the registration.
Registered office vs. domicile for tax purposes
By way of explanation, it should be noted that the registered office or legal headquarters of a company is a distinct concept from its domicile for tax purposes, without prejudice to the fact that they often coincide. According to Article 48 of the Spanish General Tax Code, the domicile for tax purposes of legal persons is at their registered office if their management and centre of administration is located there.
The procedure to move legal headquarters is not necessarily accompanied by the change of domicile for tax purposes. Consequently, in the event of changing the registered office and remaining the domicile for tax purposes, there should be no changes in the taxation of the company.
If moving legal heaquarters also entails the change of the domicile for tax purposes, the situation does not differ that much, because the corporate income tax in Spain is legislated on the state level. Finally, regarding local and autonomous taxes, like tax on economic activities or property tax, the tax on economic activities is determined by the place where the economic activity of the company takes place, and the property tax is determined by the place where the real estate of the company is located.
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