Asset Tracing in Spain: 5 Ways to Determine Who Owns a Spanish Company
Do you need to find out who owns a company in Spain, but you’re not sure where to start?
Understanding an individual’s worldwide business interests is a crucial piece of the puzzle when it comes to tracing assets. Yet, it’s not always clear exactly how to find out who owns a company in a foreign country.
In this article, we provide 5 ways to determine who the owners, shareholders or partners of a company are in Spain.
1. Use the Mercantile Registry
A great starting point is the Spanish Mercantile Registry, which is Spain’s equivalent of the UK’s Companies House. All companies in Spain are obliged to register their business in this registry.
As such, the registry acts as a reliable source of information regarding the founding partners of all companies. Additionally, the registry provides data on how much capital each partner has invested in the respective company.
Both of these acts, i.e. the registration of a company and the partners’ financial stakes, must be granted in a public deed, clearly stating the number of shares or equity participations owned by each partner.
2. Check the Registry Book of Partners (or the Registry Book of Shares)
While the Spanish Mercantile Registry is a great place to start, company owners are not obliged to provide details within this registry regarding the transmission of shares or participations.
Therefore, if a partner has sold their shares or participations, the corresponding information about the sale of said shares will not appear in the Mercantile Registry.
This applies to shares owned from the point of a company’s foundation, as well as any additional shares resulting from an increase in capital investment since the company was founded.
The good news is that this information will be logged either in the Registry Book of Partners, in the case of a limited liability company, or the Registry Book of Shares, in the case of a corporation.
However, access to the Registry Book of Partners or Shares is limited to the partners themselves, along with the administrative body in charge of keeping each respective Registry Book up to date. As a result, third parties are usually not granted access to the membership book.
3. Look in the Annual Accounts Report
Despite the lack of publicity surrounding the transfer of shares or equity participations, it’s possible in certain cases to determine who the owners of a company are by examining financial statements at the end of each fiscal year.
Thus, the General Accounting Plan states that the Annual Accounts Report will provide detail about the capital proportion of a company that, where applicable, is owned by another company – either directly or through its subsidiaries – and when it is equal to or greater than 10%.
While this means that it is possible to know who the partners of a company are, the information enclosed within the Annual Account Report has clear limitations.
For example, it does not include information regarding any stakeholders – either companies or natural persons – who own less than 10% of a company.
Likewise, the General Accounting Plan stipulates that it is necessary to indicate the actions or holdings in treasury stock within the Annual Accounts Report, and this needs to be disclosed by either the respective company or by a third party acting on behalf of said company.
This disclosure of information will also need to specify the intended final destination, along with the reservation amount per acquisition of shares in the parent company.
4. Explore the Registry of Beneficial Ownership
It is a formal requirement in Spain for non-listed companies to submit information annually regarding existing Ultimate Beneficial Owners (UBOs). These records will also be updated throughout the year if there are any changes.
The very nature of this requirement is to improve transparency concerning the formation of companies in Spain, and to help prevent money laundering and the financing of criminal activities.
By definition, UBOs are the natural persons that, either directly or indirectly, hold or control 25% or more of a company’s share capital.
The place to find this data, which will also disclose details of exactly what each beneficiary holds in a respective company, is in the Registry of Beneficial Ownership.
Hence, this is a great avenue to explore for anyone in search of information about beneficial owners.
The future implementation in Spain of the EU’s Fifth Anti-Money Laundering Directive will make the Registry of Beneficial Ownership even more open.
5. Issue a court order
Last but not least is the option to issue a court order. This is one of the most effective ways to determine who owns a Spanish company.
Issuing a court order can be done either as preliminary diligence or as a precautionary measure, as a requirement in the testing phase.
When it is suspected that a capital company – or a natural or legal person – is a partner of a capital company, Spanish courts can issue requests for information from these parties. This can happen either in a criminal or in a civil action, before or after the judgement. The specific legal instrument (precautionary, investigative, enforcement measure, etc.) used by the Spanish Courts to issue such order will depend on the specific cause of action used by the requesting party and the status of the proceedings when the request is made.
The recipient of such an order will then be required to provide all relevant details to the courts regarding their involvement with the company in question.
It’s important to note that the petition for a court order must be based on a legal action that justifies the need to access the respective information.
It’s safe to say that, when it comes to finding out who owns a company in Spain, it can be difficult to know which course of action to take first.
While we hope to have shed more light on this process, having an ally on the ground here can make all the difference when needing to navigate the Spanish legal system, particularly when needing to find the proper legal grounds to request judicial assistance.
If you need professional guidance, our specialist litigators at Lawants are best placed to advise you based on your unique circumstances.
Contact us here or use the form below to schedule a meeting with one of the team.
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