In Spain, a dormant company, known as an “inactive company,” is one that has ceased trading but has not been formally dissolved. Despite not engaging in business activities, these companies still have certain legal obligations to fulfill:
- Annual Accounts: Dormant companies must file annual accounts with the Mercantile Registry. Even if there are no transactions, the company must submit a balance sheet and a profit and loss account indicating inactivity.
- Statutory books: Even though dormant companies would not have any transactions during the year, a copy of the daily ledger and trial balance needs to be provided to the Mercantile Registry to make sure that the company complies with the inactivity.
- Corporate Tax: Although dormant companies do not generate income, they are still required to submit an annual corporate tax return (Modelo 200) to the Spanish Tax Agency, indicating that no economic activity has taken place.
- Official Notifications: The company must keep its registered address updated to receive official communications, as failure to respond to notifications can lead to penalties.
- Shareholder Meetings: Annual general meetings should still be held to approve the accounts, even if the company is inactive. These meeting are signed by the administrators of the dormant company and submitted to the Mercantile Registry along with the Annual Accounts.
By adhering to these obligations, dormant companies in Spain can maintain compliance with legal requirements and avoid potential fines or legal issues. It is important to note that, if a company remains inactive for a prolonged period, it may be advisable to consider formal dissolution to avoid ongoing obligations and potential penalties.
If you need more detailed information or specific guidance related to these companies, consulting with a legal or financial advisor familiar with Spanish corporate law, such as Spence Clarke & Co is recommended.
