As part of our business law advisory services, we assist our clients in the liquidation of their subsidiaries. This is a much more complex process than its opposite, creation, requiring perfect coordination between several parties: the company, lawyers, the accountant ("gestor"), as well as the notary(ies) of both countries and the Commercial Register.

The essential steps

If you are considering liquidating a sole proprietorship in Spain, here are the main steps to follow:

Preparing the documents:

  • Liquidation balance sheet : The liquidation balance sheet is the key document in this procedure. It must reflect the subsidiary's financial position and determine the assets that can be allocated to the sole proprietor, if applicable.
  • Notarized power of attorney with apostille : If the subsidiary's director does not wish to travel to Spain, it is necessary to grant us a notarized power of attorney with apostille, allowing us to carry out the necessary procedures. It is crucial that the power of attorney is compliant to ensure a smooth liquidation process. We, the lawyers, draft this document in both Spanish and French and coordinate its signing with your notary, thus simplifying the formalities.
  • Minutes of the liquidation meeting : Another essential document is the minutes of the sole proprietor's decisions. This report must include, in particular:
    • The decision to liquidate the subsidiary,
    • Approval of the liquidation balance sheet,
    • Removal of the administrator and appointment of a liquidator.
  • Certificate of the report : A certificate of the liquidation report will also be required.
  • Notarized deed of liquidation in Spain : In collaboration with the Spanish notary, we will draft the notarized deed of liquidation. This document formalizes the company's liquidation decisions with the Spanish authorities.

Signing of the deed before a Spanish notary

The deed of liquidation will be signed before a notary in Spain.

Registration and deregistration with the Commercial Registry

Once the deed of liquidation is signed, we will register it with the Spanish Commercial Registry to deregister the company. This step marks the legal end of the subsidiary's existence.

Closing the subsidiary's bank account

It is important to close the company's bank account in Spain and ensure that no financial obligations remain after the liquidation.

Collaboration with the Accountant

The smooth progress of the liquidation also depends on close collaboration with the company's accountant. Here are the key actions to coordinate with your accounting department:

  • Obtaining certificates of no outstanding debts,
  • Preparing the liquidation balance sheet,
  • Filing the corporate income tax return for the last fiscal year,
  • Settling the tax on corporate transactions,
  • Registration with the Spanish tax authorities.

Estimated Liquidation Timeframe

Generally, if the administrator wishes to avoid traveling to Spain, the liquidation of a Spanish subsidiary takes approximately three months. This timeframe can be reduced if they travel to Spain.

However, this estimate can vary depending on several factors: the speed with which documents are processed in France, obtaining the apostille, prior filing of the company's accounts with the Commercial Registry, etc.

Conclusion

Although complex, the liquidation of a subsidiary in Spain can be simplified through smooth coordination between the various parties involved. Our law firm, specializing in business relations between France and Spain, is available to assist you throughout this process.

For tailored assistance, please do not hesitate to contact us.

We also invite you to read our article on : the liquidation of Spanish companies with multiple shareholders