The move to Ciments Molins headquarters in Madrid in October 2017 was correct. It is enough to hold the boards of directors and the shareholders’ meetings there to consider that a company has its registered office in a certain city. This is stated in a ruling by the Commercial Court No. 3 in Madrid, the first to analyze the legality of the leak of registered offices that took place after October 1, according to ARA.
A group of shareholders of Ciments Molins, members of the owner family, took this decision to court considering that the transfer was fictitious and that, in reality, the company was still managed from Sant Vicenç dels Horts, its historic headquarters.
But Judge Jorge Montull Urquijo maintains that there is nothing to say and that everything has been done within the law. The law on capital companies, in article 9, states that the registered office of a company must be located “in the place where the center of its effective administration and management is located, or where it has its main establishment. ”. The plaintiffs claimed that the management team is still working in Sant Vicenç dels Horts, where the group also has its main factory, and that, therefore, it cannot be considered that the company is actually being managed or run from Madrid.
On the other hand, the president of the company, Joan Molins Amat, explained to the court that he had moved to Madrid “the minimum necessary” to be able to consider that the registered office is in Madrid. And the judge is right.
San Vicente versus Madrid
What is this “essential minimum”? The ruling explicitly states what exactly Ciments Molins does at its headquarters in Madrid: holding the majority of the boards of directors (49 meetings in Madrid and 12 in Barcelona, since the change of headquarters), the shareholders’ meetings (in four times) and the meetings of the usual commissions in listed companies, such as those of remuneration and appointments or those of audit. It also has four employees, one of whom is the group’s chief financial officer (Jorge Bonnín, who joined the company in 2019 and lives in Madrid).
The ruling also recognizes everything that Ciments Molins has in Sant Vicenç dels Horts: the departments of finance, organization and systems, management control, taxation, internal audit, legal, human resources, purchasing, business development and sustainability, selection, training, the corporate industrial technical department and the country directors department, with their corresponding directors and staff. This in addition to the secretaries of management.
It is enough to hold the meetings of the board of directors and the respective committees ”
However, the judge concludes that “it is sufficient to hold the meetings of the board of directors and the respective committees” at the Madrid headquarters and that, therefore, in this case the center of the ‘senior management and administration of the company effectively’.
The plaintiffs claimed that the company’s management team still resides in Catalonia. The judge admits that this may be an indication “but not evidence” that the company is not heading from Madrid. He also recalled that during the trial the company argued that, in reality, managers do not stop traveling and concludes that, therefore, with this criterion, this requirement must be “made more flexible”.
The plaintiffs have not informed whether they will appeal the sentence, which can be appealed to the Provincial Court of Madrid. The plaintiffs have been represented by the lawyer Miquel Àngel Alonso, of Augusta Abogados, while the company was defended by the law firm Garrigues.