Changing the name of a limited company in Spain is a legally viable process that often responds to business strategies, corporate restructurings, or even court orders. Although this modification does not alter the legal identity of the company or its prior obligations, it does involve a series of administrative procedures that must be completed to ensure its validity before official bodies. If you would like to learn more about this, keep reading, as we explain everything in the following post.
Is it legally possible to change the name of a limited company?
As mentioned in the introduction, yes, it is legally possible to change the name of a limited company in Spain, provided that the corresponding legal and administrative steps are followed. This process, known as changing the company name, does not affect the legal identity of the company or its previous obligations.
Situations that require a limited company to change its name
Changing the company name under certain circumstances is advisable and sometimes necessary. What we mean by this is that, in some cases, the decision is voluntary and responds to business strategies, while in others, it must be carried out.
Voluntary name change
A voluntary change is one of the most common reasons for modifying a company’s name. This often arises from various strategic factors, such as:
- Rebranding or modernising the corporate image.
- Expansion into new markets with a name more suited to the sector.
- Differentiation from competitors if the original name causes confusion.
- Correcting errors in the registration with the Companies Register.
- Changes in the company’s activity that necessitate a more representative name.
Court order for a name change
On the other hand, there are situations where a company is required to change its name by court order. Some of the most common reasons include:
- Trademark disputes or intellectual property rights issues when the name infringes a registered trademark.
- Misleading or illegal names.
- Judgments for unfair competition when the name is deceptive or exploits the reputation of another company.
- Legal actions resulting from fraud or administrative sanctions.
Modifications due to mergers or demergers
The final reason we want to mention is when a limited company undergoes a corporate restructuring process, either through a merger with another company or a demerger into several entities:
- When two or more companies merge, they may adopt a new name that reflects their integration.
- If a company divides into several entities, one or more may need to modify their name.
Steps to follow to change the name of a limited company
The procedure for modifying the company name basically requires complying with a series of legal formalities. Here’s how it works:
Application for a negative certificate
Before proceeding with the name change, it is necessary to verify that the new name is available, just as when creating a Ltd. This involves requesting a negative certificate from the Central Companies Register.
Call a general meeting of shareholders
The next step is to obtain approval for the change from the shareholders. A general meeting must be called, where the modification of the company name will be put to a vote.
Formalise the name change before a notary
Once the modification is approved, it is mandatory to formalise the name change through a public deed before a notary. This deed will reflect the decision of the meeting and the new company name.
Registration in the Companies Register
After signing before the notary, the next step is registration in the Companies Register, which officially confirms the new company name. This registration is completed in three brief steps:
- Submit the public deed to the relevant Companies Register.
- Pay the registration fees.
- Wait for the resolution and publication in the Official Gazette of the Companies Register (BORME).
Notification of the name change to the tax authorities and Social Security
Once the modification is registered, it is mandatory to inform various bodies of the change. The company name must be updated in the Census of Employers, Professionals, and Withholders at the Tax Agency. It is also necessary to inform Social Security to update the company information in the contribution and employee affiliation systems.
Costs and timeframes associated with the name change
The total cost of modifying a company’s name varies based on factors such as notary fees, registration fees, and gestor services if professional advice is sought. Changing the name of a limited company can cost between €300 and €800, although this range may vary depending on the professionals involved and additional costs arising from modifying internal documents and contracts.
Regarding the timeframe for changing the name of an Ltd, the completion of the entire process depends on how quickly the procedures are carried out and the administrative workload of the registers. Generally, the procedure can be completed within a period of three to six weeks.
Impact of the name change on tax and social obligations
The change of a company name does not alter its legal identity or its obligations to official bodies, but it does require compliance with a series of notifications and updates to avoid legal or tax issues. Are there specific restrictions regarding the new names that can be chosen? Yes, when changing the name of an Ltd, certain requirements and regulations established by the Companies Register must be adhered to, such as:
- It cannot be identical or similar to that of another registered company.
- It should not create ambiguity regarding the company’s activity or confuse consumers.
- It must not include prohibited or restricted terms.
- The chosen name must not infringe third-party rights, such as trade names or registered trademarks.
If the new name implies a different activity, it may be necessary to modify the company’s corporate purpose.
Conclusions
In conclusion, changing the company name of an Ltd is an accessible procedure but requires planning and analysis to avoid administrative or tax inconveniences. When in doubt, seeking legal advice is the best option.
