Commentary on the Resolution of November 28, 2024 of the General Directorate of Legal Security and Public Faith (DGSJFP).

With recurrence, which increases at the end of the financial years, there are problems related to the appointment of voluntary auditors of commercial companies ex article 265. 2 of the TRLSC, which provides that “In companies that are not obliged to have their annual accounts audited by an auditor, shareholders representing at least five percent of the share capital may request the commercial registrar of the company’s registered office to appoint, at the company’s expense, an auditor to review the annual accounts for a given year, provided that three months have not elapsed since the closing date of that year”.

This precept, the wording of which is clear, has given rise to an interesting debate in terms of interpretation on certain aspects derived from the rule, in relation to other precepts regulating the appointment of an auditor, in particular Article 264.

The Resolution of November 28, 2024 of the Directorate General of Legal Security and Public Faith (DGSJFP) (BOE December 25, 2024) deals with the appeal filed by the chairman of the board of directors of the company EACSL against the qualification note of the Mercantile Registrar of Albacete. Said note rejected the registration of the appointment of a voluntary auditor agreed in the general meeting to verify the accounts for the fiscal year 2023 and, as far as the present commentary is concerned, it said:

“2. A Request for the Appointment of an Auditor has been filed in accordance with Article 265.2 of the Spanish Corporate Law.

265.2 of the Capital Companies Act, at the request of a minority shareholder, the Registrar having resolved that the appointment was appropriate and the same being pending as it is being appealed before the General Directorate and pending the resolution of the same.

3º Since when the appointment is made by the General Meeting of the Company, it must take place before the end of the first financial year to be audited and for an initial period of time, which may not be less than three years from the date on which the first financial year to be audited begins, all in accordance with the provisions of Article 264.1 of the Consolidated Text of the Capital Companies Act”.

The appeal against the rating argued, among other arguments, that the appointment of a voluntary auditor was valid despite the request of the minority shareholder, and that the appointment of a voluntary auditor did not apply.

minority shareholder and that the time restrictions did not apply to companies not obliged to audit their accounts.

In order to resolve the appeal, the DGSJFP analyzes the directly applicable regulations of the Commercial Code (articles 18 and 20), articles 253, 263, 264 and 265.2 of the Spanish Commercial Code (articles 253, 263, 264 and 265.2 of the Spanish Commercial Code),

264 and 265.2 of the Capital Companies Act, Law 22/2015, on Account Auditing, and in particular, Article 22, which regulates the hiring of auditors for non-mandatory audits and previous resolutions of the DGSJFP itself, as most recently those of April 18 and 30, 2024.

And, resolving the aspects of greatest interest due to the fact that they arise with certain frequency in ordinary practice, the DGSJYFP establishes the following doctrine:

1. On voluntary appointment after the close of the financial year: It points out that the time limitations of Article 264.1 LSC apply only to companies obliged to audit their accounts. In the case of voluntary audits, the freedom of appointment is recognized at any time, even after the close of the financial year.
2. On the need for the appointment to be for at least three financial years. The resolution establishes that, in the case of voluntary appointments, it is not necessary that the appointment be made for a minimum period of three years.
3. On the competence to appoint the voluntary auditor. It clarifies that the appointment can be made by both the general meeting and the administrative body, as there is no exclusive competence attribution.
4. Article 265.2 TRLSC guarantees minority shareholders the right to appoint an independent auditor, but this right is not violated if the company appoints a voluntary auditor that complies with the principles of independence and professionalism.

It is reaffirmed that, in order to preserve the minority shareholder’s right, the voluntary appointment must: a) Be registered in the Mercantile Registry. b) Guarantee access to the audit report.

The Resolution considers that the voluntary appointment can prevail over the request of the minority shareholder if it meets these requirements, aligning itself with the previous doctrine of the DGSJFP, and therefore holds that there is no sort of lis pendens, so that the prior request at the request of the minority shareholder(s) does not prevent the corporate bodies from appointing a voluntary auditor.

The decision reaffirms the independence of the auditor as a sufficient guarantee to protect the rights of minority shareholders, regardless of the origin of the appointment.

The thesis upheld by the Directorate General represents an advance in the interpretation of corporate rights, underlining the balance between the rights of minorities and the organizational freedom of non-compulsory companies and reinforces the flexibility in the appointment of auditors in a context of non-compulsory audits, provided that transparency and the principles of professional independence are respected.

Read complete sentence