The amendment of art. 285(2) of the Companies Act (abbrev. LSC), by the Urgent Insolvency-Related Measures Act 9/2015 of 25 May, allows directors of companies limited by shares, unless otherwise provided in the articles of association, to change the company’s registered office address to any place on the national territory (a power which, prior to Act 9/2015, was limited to changes within the same municipality).
Articles abound which, having reproduced the legal provision at the time of drafting such articles (either art. 149 of the repealed Public Limited Companies Act (abbrev. LSA) or the analogous art. 285(2) LSC prior to Act 9/2015), have not been altered after the aforementioned amendment, retaining the original wording that “the governing body shall have the power to change the registered office address within the same municipality”.
The DGRN’s decision of 3 February 2016 (Official Journal of Spain - abbrev. BOE - of 23 February 2016) addresses the question of whether, in such cases, the limitation of the power of directors to change the registered office address within the same municipality applies, inasmuch as a provision of the articles of association contrary to the general rule of the new art. 285(2) LSC, or whether, insofar that it reproduces the legal rule in force at the time of drafting, it should be construed that the intention of the shareholders is to be bound by the legal rules in force at any particular time and, therefore, the rule of the current art. 285(2) LSC, allowing directors to change the registered office address to any place on the national territory, should apply.
The above decision concludes that in these cases, despite the limitation provided by the articles of association, directors have the power to change the registered office address to any place on the national territory. The DGRN applies to a case such as this its own doctrine of “dynamic referral”, set out, inter alia, in its decision of 10 October 2012. According to this doctrine, all references in the articles of association, on any matter where the shareholders refer to the legal regime then in force (whether by express or generic referral to the law or by reproduction in the articles of the supplementary legal regulation), must be construed as indicative of the shareholders’ intention to be bound by the supplementary system intended by the legislator at any particular time.
In view of the above, the safest solution would be to review the articles of association, ascertain the effect of the new art. 285(2) LSC in light of the wording of the company article in question and alter, where appropriate, such wording as deemed most appropriate in each case.