The legalization of business books is a formal obligation established by different legal provisions such as the Mercantile Registry Regulations (Article 329 RRM) or the General Tax Law (Article 29 LGT).
Kinds of accounting book in Spain
We must distinguish two kinds of books: accounting books and corporate books.
Among accounting books we can mention the following:
- The Journal, where the operations related to the company's day-to-day activity are recorded, and
- The Inventory and Annual Accounts Book, which is opened with the initial balance sheet, and in which the amounts and balances are transcribed on a quarterly basis. These bring together annually the closing inventory and the annual accounts for the financial year.
Among corporate books we can mention the following:
- The Minutes Book, which contains all the agreements made in the Ordinary or Extraordinary Meetings and the Collegiate Bodies of the company.
- The Register of Members (in the case of limited partnerships).
- The Book of Registered Shareholders (in the case of public limited companies).
- The Contract Registry Book between the company and the sole Partner (only in the case of sole proprietorships).
Legalization and exceptions
These books must be legalized annually, although there are the following exceptions:
- In the case of Minutes Books, these can also be sent one by one or quarterly, for example.
- In the case of the Register of Members (Limited Companies) or Book of Registered Shareholders (Public Limited Companies), they may be legalized only when there is a change in their content.
In addition to the aforementioned books, it is also possible to legalize auxiliary books (for example, the accounting ledger) and others that are kept by the employer for their activity.
Subjects required to present books
- All employers as a general rule (Article 25 of the Commercial Code).
- The entities obliged to be registered in the Mercantile Registry (Article 81 of the Mercantile Registry Regulations).
- The entities registered in the Mercantile Registry by virtue of specific provisions such as the Retail Trade Regulation Law.
- The entities obliged to formulate accounting in accordance with the rules of the Commercial Code (Article 68 of the Personal Income Tax Regulation).
- Individual employers, even if they are not required to register in the Mercantile Registry, when they are subject to personal income tax in the direct estimation regime, and who keep their accounts in accordance with the rules of the Commercial Code.
Means of submission
Both the accounting books and the corporate books have to be submitted electronically for financial years closed after December 31, 2014 (Instruction of February 12, 2015, of the General Directorate of Records and Notaries, on legalization of books of employers, in application of the provisions of Law 14/2013 on entrepreneurs) in the Mercantile Registry corresponding to the employer's registered office.
Deadlines for legalizing books
The deadline for legalizing books is four months from the closing date of the fiscal year. In the event that the closing date is on December 31, 2020, the legalization period begins on January 2 of the following year and ends on April 30, 2021.
Penalties
Commercially, no penalty has been established directly for lack of legalization, but the General Tax Law establishes penalties indirectly for failing to comply with accounting and registration obligations (Article 200.3 General Tax Law), which has the character of a serious penalty and carries a fixed fine of 150 euros.
In the case of inaccuracy or omission of operations or the use of double accounts, a proportional fine of 1% of the omitted, inaccurate, or falsified charges or credits is liable with a minimum of 150 euros and a maximum of 6,000 euros.
Likewise, in the event of bankruptcy, any breach of accounting when being obliged to do so or the use of double accounts or committing relevant irregularities when accounting will lead to the bankrupt being held responsible.
Other information to keep in mind
The Commercial Code establishes that the probative value of the employer's books and other accounting documents will be appreciated by the Courts.
Passing on the books implies that they are generally recognized, while showing the books implies a partial recognition that can be decreed ex officio or at the request of a party when the person to whom they belong has an interest or responsibility in the matter.
The recognition of the books will be done in the establishment of the employer, in their presence, or in that of the person they delegate.
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