The Spanish College of Registrars and the National Securities Market Commission have issued a joint statement, dated March 26, 2020 in which they suggest various options on the proposed application of the result (PAR) in the annual accounts (CCAA) , given the situation derived from the crisis by COVID-19, which we summarize schematically:
First option: the management body can reformulate the CCAA y modify PAR under the provisions of art. 38 c) of the Commercial Code that establishes that: "However, all risks originating in the year or in a previous year must be taken into account, even if they were only known between the closing date of the balance sheet and the date on which it is formulated, in which case information will be given in the report, without prejudice to the reflection that may arise in the other documents that make up the annual accounts. Exceptionally, if such risks were known between the formulation and before the approval of the annual accounts and affected the faithful image in a very significant way, the annual accounts should be reformulated. ”
The reformulation of accounts would imply the recall of the board for reasons of force majeure, for its new call, which could be done under art. 40.6 of Royal Decree-Law 8/2020.
Second option: the management body may replace the PAR initially formulated with a new PAR that suits the most current real situation of the company. With this option, it would not be necessary to reformulate the accounts or, therefore, call off the board, but it would require the justification by the management body of the new context and the recent changes produced as a result of the health crisis and a letter from the auditor of accounts that report that this PAR modification does not modify their audit opinion.
Third option: Call another subsequent meeting to decide on the PAR contained in the meeting call for approval of the Annual Accounts, although said subsequent meeting would have to be held within the legally established period for holding the ordinary meeting (period extended by Royal Decree-Law 8/2020).
This option would be justified in view of the possible existence of delegations and votes already conferred or cast in favor of the PAR included in the call, and would require the same justification and written requirements of the accounts auditor.
From the accounting perspective, the net accounting result will be taken to cover losses or surplus.
For the purposes of depositing accounts, the certification of the administrative body must state the non-approval of the PAR (see Art. 378.5 of the Regulations of the Mercantile Registry on the certification of non-adoption of a corporate agreement).
From Ribelles Abogados we remain at your entire disposal for any clarification, doubt or need for advice Regarding the existing options for the PAR, the Call or celebration of the meetings of the administrative bodies or of the Ordinary or Extraordinary General Meeting, in attention to the special situation that is lived as a consequence of the sanitary crisis that is lived in these days.
