Every company operating in Spain is required to keep a set of official books. This is far from a minor formality: they are the foundation of its accounting, the record of its shareholders’ decisions and the first documents that the Spanish Tax Agency, a bank or a court will ask for whenever something is reviewed.
In companies with a foreign parent or non-resident shareholders, it is common to find books that are out of date or have not been legalised, because the group reports in its own country and it is assumed that this is enough. It is not: the Spanish subsidiary must keep its own books in accordance with Spanish regulations.
What are a company’s official books?
They are the records that the law requires companies to keep in order to document their economic activity and corporate decisions. They fall into two groups:
- Accounting books, governed by the Commercial Code (Código de Comercio).
- Corporate books, governed by the Capital Companies Act (Ley de Sociedades de Capital).
In addition, there are the tax record books required by tax legislation (mainly VAT).
Mandatory accounting books
Journal (Libro Diario)
It records, day by day and in chronological order, all of the company’s transactions. Transactions may be recorded in aggregate for periods of no more than one month, provided the detail is kept in other records.
Inventory and Annual Accounts Book (Libro de Inventarios y Cuentas Anuales)
It includes the detailed opening balance sheet, the trial balances (with totals and balances, at least quarterly), the year-end inventory and the annual accounts.
Mandatory corporate books
Minutes Book (Libro de Actas)
All capital companies must keep one. It records the resolutions of the general meeting and of the management body when it is collegiate (board of directors).
Register of shareholders (SL) or of registered shares (SA)
It shows who the shareholders are, their holdings and any transfers, as well as any rights created over the shares.
Register of contracts with the sole shareholder
Mandatory for single-member companies. It records the contracts entered into between the company and its sole shareholder.
Tax record books
In addition to the above, VAT legislation requires companies to keep, among others:
- Register of issued invoices.
- Register of received invoices.
- Register of capital goods, where applicable.
- Register of certain intra-Community transactions, where applicable.
Companies under the SII system (Immediate Supply of Information), such as large companies or those registered in REDEME, keep these books through the Spanish Tax Agency’s (AEAT) electronic office, submitting the information almost in real time.
How the books are legalised
Since Law 14/2013 on support for entrepreneurs, legalisation is exclusively electronic:
- Electronic format: the books must be prepared in electronic form. Blank paper books are no longer legalised.
- Filing with the Commercial Registry: they are submitted electronically to the Commercial Registry (Registro Mercantil) of the company’s registered office.
- Deadline: within 4 months after the end of the financial year. For a company whose financial year matches the calendar year, the deadline is 30 April.
- Corporate books: the minutes book and the registers of shareholders or of contracts with the sole shareholder are submitted with the content of the financial year. If there have been no changes, it is advisable to check with your adviser whether they need to be submitted for that year.
How long must they be kept?
The Commercial Code requires books, correspondence and supporting documents to be kept for 6 years from the last entry. For tax purposes, bear in mind that the Tax Agency can review earlier years when tax losses are offset or deductions generated in previous years are applied, so in practice documentation is usually kept for longer.
What happens if they are not up to date?
- Tax penalties: the General Tax Act penalises failure to comply with accounting and record-keeping obligations. Fines range from a fixed amount to a percentage of turnover in the most serious cases, such as not keeping accounts or keeping separate sets of accounts.
- Loss of evidential value: books that have not been legalised or are poorly kept carry less weight as evidence in court or in a tax inspection.
- Problems in key transactions: due diligence, capital increases, the sale of the company, bank financing or a REDEME application all require books to be in order.
- Risk for directors: deficient accounting can have consequences for their liability, especially in insolvency situations.
How to keep them up to date without surprises: practical checklist
✓ Accounts updated every monthNot just at year end.
✓ Quarterly trial balancesClosed and reviewed, as required by the Commercial Code.
✓ Minutes drafted and signedAfter every general meeting or board meeting.
✓ Shareholder register up to dateWith every sale, capital increase or pledge, as required by the Capital Companies Act.
✓ VAT record books reconciledWith the tax returns and with the AEAT’s SII system if you are required to use it.
! Electronic legalisation before 30 AprilIf the financial year matches the calendar year, at the Commercial Registry.
✓ Backup copiesOf the legalised books and their supporting documents.
✓ Subsidiaries of foreign groupsReconciliation between the Spanish accounts (Spanish GAAP, PGC) and the group reporting.
Frequently asked questions
Does a self-employed person have to legalise books at the Commercial Registry?
Generally, no. Self-employed individuals keep tax record books according to their regime (direct assessment or modules), but legalisation at the Commercial Registry applies to companies.
Can I keep the subsidiary’s accounts using only the parent company’s criteria?
No. The Spanish company must keep its accounts in accordance with the Spanish General Accounting Plan (PGC) and legalise its books in Spain, even if it also reports to the group under other standards.
What should I do if I did not legalise the books for previous years?
The situation can be regularised by submitting them late. The sooner this is done, the lower the risk in the event of a review.
Can minutes books be kept on paper?
Books submitted for legalisation must be in electronic format since the 2013 reform.
Are your company’s books up to date? At GR International Advisors we review the status of your company’s official books, regularise anything outstanding and handle their legalisation every year, with particular attention to subsidiaries of international groups. [Request a review]
The information in this article is for guidance only. Each case requires a personalised analysis by an adviser.