The Law relating to companies in Spain dictates that every commercial company must have an individual responsible for management.
The administrator will carry out all the management of the company, and of course, will be the ‘representative’ of the entity.
There are several options to choose as administrator: Sole Administrator, Joint Administrator, Solidarity Administrator or Board of Directors (composed of at least 3 members).
Normally, the figure of Administrator is not a figure to which a fixed remuneration is assigned, but a salary can be established if desired.
Anyone who wishes may be a company administrator, there are no more requirements than:
• Not being minors
• Being mentally able
• Not have criminal offences
• In some cases, not having the official position, due to incompatibility.
The General Meeting of Members is the one who appoints the Administrator.
The Administrator must act diligently and honestly with society, that is, the administrator cannot take advantage of business opportunities for personal benefit.
Therefore, the Administrator who does not comply with the duties of the position, will personally respond to partners and / or creditors for the damages caused.
• If the Administrator does not call meetings
• Should not apply for bankruptcy in the following 2 months in case of insolvency
• If the Administrator does not keep accounts of any kind
• If the Administrator performs risky operations; for example excessive purchases after a year of losses
Therefore, the figure of the Administrator carries more responsibilities than people commonly think, and to not diligently meet their obligations can have serious consequences.
GB Abogados provide a range of legal and accountancy services to international companies in Spain.
If you are thinking of setting up a business in Spain or need assistance with an established company, please don´t hesitate to contact us for a no obligation consultation.