Managing a company means running
and also obtaining maximum economic performance from the company.
Company administrators
are those people who run and represent the company.
The company statutes
must indicate who will be responsible for the administration.
The administration may be carried out by:
1. A
sole administrator.
2. Jointly
and severally administration. This means that, for example,
in the company bank account either of the two administrators
can sign without distinction.
3. Joint
administration. This means that both administrators are obliged
to sign.
4. Board
of Directors formed by a minimum of three members The responsibility
is a legal responsibility, that is to say they must act as
the law specifies. Apart from this, they are personally responsible
for any bad administration that they may have carried out
within the company. Administrators must respond to any conflicting
acts against the law or the company statutes.
Administrators must act
diligently. This means that they should be well informed,
watch over the company, maintain confidentiality and be loyal
to the company. In other words they should act in the interests
of the company and not in their own interests.
Administrators must also
answer for any material or moral damage that they have inflicted
upon the company. |
This is defined as the capacity to be responsible before
a third party for their acts. Company administrators are
answerable for any tax offence produced by the company.
This means that if the company does not comply with its
duties to do its tax returns in the correct period or if
all the income has not been declared, the administrator
is personally responsible. This responsibility is specified
very clearly in the 'Ley General Tributaria' (General Spanish
Tax Law).
Administrators may also be criminally responsable if they
are believed to have committed an offense, this is, when
they defraud the Spanish Inland Revenue. Either of the following
situations is considered to be an offence:
1. When the company has made retentions
but has not declared them to the tax authorities.
2. When the company has wrongfully taken
advantage of tax deductions or subsidies.
3. When the work of any Income Tax Inspector
is obstructed.
In certain cases specified by law, criminal responsibility
may result in a prison sentence for those administrators
who, in relation to tax matters, have not acted correctly.
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Years ago companies were set up and Administrators
were not responsible for any bad administration. Nowadays
the law has changed a great deal in this aspect and this matter
is now more serious, to the point of becoming a criminal responsibility
in some cases. The law is very strict now with management
on the part of the company administrator especially with regard
to taxes, this means when the obligatory tax returns, such
as Corporate Tax, are not presented , or for trying to defraud
the Spanish Inland Revenue, or for not paying the retentions,
or for not paying the IGIC (Canarian VAT) that has been charged
etc, etc.
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THE
RESPONSABILITY OF COMPANY ADMINISTRATORS
September 2001
Tax
Responsibilities
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