Appointment and dismissal of company directors
In this post we want to explain from JLA Notarios how to appoint a director in a limited company, how to dismiss a director of a limited company and the importance of the deed of dismissal and appointment of director.
How to process the appointment of an administrator in a limited company?
The appointment of the administrator of a company must be made for the first time in the notarial deed of incorporation of a company. Therefore, whenever there is a commercial company, there must be at least one administrator at all times.
At this moment of incorporation of a limited company, it is possible to appoint a natural person as administrator (the most common) or a managing company (in this case, it is also very important to designate the name, surname and tax identification of the natural person who will be in charge of the administration). If you want to learn more about this topic, we have an article on our blog about the creation of limited companies.
How can I appoint a director in a company?
The appointment of an administrator in capital companies must be decided by the Shareholders' Meeting. Therefore, the shareholders must meet in a Meeting and agree by majority of the capital present the appointment of one or more new administrators.
This agreement is recorded in the company's minutes book and the company must issue a certification of the adopted corporate resolution. This certification is presented at the notary to be incorporated into the deed of appointment of administrator. At JLA Notarios we can assist you with the drafting of this certification if you need it.
Dismissal of a director of a limited company
The dismissal of a director is almost always carried out together with the appointment of a new director in the same deed of dismissal and appointment of director. The dismissal of a director of a limited company can occur for various reasons: cessation, removal or resignation. However, and although in limited liability companies the positions are indefinite, the change of director may also be caused by the company’s own articles of association having established a term for the duration of the position.
It is also the competence of the Shareholders' Meeting and, just as when appointing a new director, it is necessary to submit the certification of the director’s dismissal resolution to the notary.
Furthermore, to dismiss a director, it is important that the director leaving their position attends the notary to sign the deed of dismissal and appointment of director, because if not, they will have to be notified that they have been dismissed, to comply with the requirements of article 111 RRM (article 111 of the Commercial Registry Regulations), which increases the cost of the dismissal and appointment procedure.
How can I change the settings of how the administrators operate in a company?
The management of a company may be vested in a sole administrator, in several administrators (jointly or severally) or in a Board of Directors. To learn more about the possible configurations of administrators, at JLA Notarios we have written a post about types of management in capital companies.
To change the type of administration, it is necessary for the company to hold a meeting and amend the company’s articles of association. Therefore, it is necessary to comply with all the requirements for statutory amendments of capital companies as set out in articles 285 and following of the Revised Text of the Capital Companies Act.
After that, it would be necessary to submit a certification of the resolution to amend the articles of association at the notary’s office and sign a deed of amendment of the articles of association.
Change of administrator in a limited company: Steps
In summary, the steps for the change of administrator in limited companies are as follows:
- The Partners' Meeting may agree to dismiss the administrator or, where appropriate, accept their resignation, proceeding to appoint a new administrator, who must accept the position and this must be reflected in the Minutes of the General Meeting.
- A certification of the resolution adopted by the partners' meeting is issued.
- The Notary authenticates the signature on the certification, which is incorporated into the deed of dismissal and appointment of administrator, and the resolution is formalised in a public deed.
- Registration in the Mercantile Registry of the deed of dismissal of the administrator and appointment of the new administrator, which must be submitted within ten days following acceptance of the position, according to article 216 of the Capital Companies Act.
JLA Notaries, Notary for the deed of dismissal and appointment of administrator
We hope this article about the appointment and dismissal of company directors has been useful to you. On our website, you can find more information about the appointment of directors and the necessary documentation for such appointment.
Processing the deed of dismissal and appointment of a director is a common procedure in our notary office. In our effort to optimise processing times, you can now also process the appointment and dismissal of directors in companies through notarial authorisation by videoconference in our online notary. Remember that personalised advice will help avoid legal setbacks.
At JLA Notarios, notary Barcelona, we will be happy to advise you if you need further assistance. If you prefer, you can write to us at our email address bcn@jlanotarios.com or fill in the contact form on our website.
