Commercial Register: Principles and Legal Effects

Posted on Feb 3, 2025 in Law

Key Principles of the Commercial Register

  • Mandatory Registration

    Article 4 of the regulation states that registration in the Commercial Register is mandatory unless expressly provided otherwise. The lack of registration of any person or act that must be registered cannot be invoked by the person who is obligated to do so.

  • Public Document

    Article 5 of the regulation provides that registration in the Commercial Register shall be conducted under a public document. However, it can occur under a private document where required by the laws in the Commercial Register regulation.

  • Disclaimer

    Article 6 of the Commercial Registration Regulations states that registrars will qualify, under their responsibility, the legality of the extrinsic forms of documents of all kinds under which registration is sought. They will also assess the capacity and legitimacy of those who grant or subscribe to the documents, and the validity of their content based on what results from them and the log seats.

  • Standing

    Article 7 of the Business Register regulation establishes that the contents of the register shall be presumed correct and accurate. They are under the protection of the courts and have effect until a legal declaration of inaccuracy or invalidity is signed. However, this standing does not validate acts or contracts that are void under the law.

  • Public Faith

    Article 8 of the register and the regulation states that the declaration of invalidity or otherwise of the Commercial Register shall not prejudice the rights acquired in good faith in accordance with the law. These rights are acquired under the act or contract that is valid in accordance with the contents of the register.

  • Enforceability

    Article 9 of the Commercial Registration Regulations establishes the scope of registration towards third parties, based on the principle of legality. It consists of four aspects:

    • Acts subject to registration shall apply only to third parties in good faith from their publication in the Official Gazette of the Register, as from that publication they are presumed to be known to all.
    • When it comes to operations within 15 days following publication, acts registered and published will not be effective against third parties who prove that they could not have known them.
    • In the event that there is a discrepancy between the content of the publication and the content of the registration, third parties in good faith may rely on the publication if it is favorable to them. In this case, whoever caused the discrepancy must compensate the affected party.
    • The good faith of the third party is assumed unless it is proven that they knew the act subject to registration and not registered or published, or the discrepancy between publication and registration. In other words, the presumption of good faith of the third party can be broken by proving that they knew the act subject to registration or already registered.

  • Priority

    Article 10 of the Business Register regulation states that once a title has been entered in the Commercial Register, no other title of the same or earlier date that is opposed to or incompatible with it can be registered. If only the presentation entry had been extended, any other title inconsistent with or opposed to it may be entered during its term. In the same way, the first record to be accessed will be preferred over those entered later. The registrar shall practice the transactions in order of presentation.

  • Chain of Title

    Article 11 of the Business Register regulation contains three aspects:

    1. To be able to register acts or contracts relating to a subject, it is essential that the person who acts or registers the document has previously registered the inscribable document.
    2. To register a document amending or extinguishing another previously issued, it will be required that the latter has been previously registered.
    3. To register acts or contracts awarded by agents or managers, it will be necessary that they have been previously registered.

  • Formal Advertising

    Article 12 of the Mercantile Registry Regulations states that the Commercial Register is public. The Registrar of Companies is responsible for the professional treatment of the contents of the registry entry, ensuring that direct advertising is effective while also ensuring responsible handling.