Voluntary appointment of Auditor to Audit Annual Accounts

The appointment of auditor (either in voluntary or compulsory cases) is a competence of the General Assembly, shareholders’ Body, (art. 160 b) LSC.

The appointment of auditor when compulsory must be done before ending the fiscal year to be audited, although the auditor acceptance can be signed later on.

When the auditing is not compulsory it is possible to do the appointment of auditor, once the fiscal year has concluded.

1. Terms
In cases of obligatory audit, the appointment of auditor must be done for a period between 3 years (as minimum) and 9 yeas (as maximum), (art 264 LSC and art. 19 of the Account Auditing Law)1.

2. Registration at the Mercantile Registry
It is necessary to submit the following certificates duly legalized by a notary to the Mercantile Registry:

– Certificate of General Assembly agreements issued by the company in which is contained the auditor identity, date, and terms of the appointment of auditor and;
– Certificate of the auditor accepting the appointment.

3. Voluntary appointment of auditor and its relation with the right of requesting the auditor appointment by the shareholders

The shareholders with at least 5% of the equity capital, may require the appointment of Auditor to the Mercantile Registry within the 3 months after the closure date of the fiscal year (art. 265.2 LSC) except if the auditor has been voluntarily appointed, and the
appointment has been registered at the Mercantile Registry.

The doctrine of the General Directorate of Registries and Notaries, according to the formal publicity principle and in order to prevent any detriment for the shareholders (R.25.8.2005), required not only the appointment of auditor and its registration at the
Mercantile Registry, but also the issuing and the entry of auditing report into the Mercantile Registry (despite the auditing is not compulsory for the company)2.

Nevertheless, the appointment of an auditor does not imply that the auditor can ascertain the value of company shares in inter vivos or mortis causa transfers, nor in the settlement rules for usufruct of the company, according to the Spanish Corporation Law.

 

1 The requirement that the appointment of auditor must be for an initial period not less than 3 years and not longer than 9 years (art. 264.1 LSC) is related to the legal obligation of doing so (GDRN Resol. 20-06-2016).

2 More clearly the (RDGRN. 13-05-2007) provides that “… The voluntariness of a society to audit it accounts or not, when the same is not obliged to do it legally, ends when the General Assembly agreed the accounts auditor appointment and it is registered in the Mercantile Registry”.