Legal Advisor and Board Secretary
What is a legal advisor?
The legal advisor is responsible for providing legal advice on the legality of the resolutions and decisions adopted by the administrative body and on the deliberations attended.
The legal advisor is useful to avoid the consequences that may arise from a lack of diligence on the part of its administrators in the corporate activity, trying to avoid non-compliance on their part.
Therefore, having a legal advisor is interpreted as a diligent practice on the part of the company’s management body.
The legal advisor may also act as Board Secretary or act alongside the Board Secretary in the capacity of legal advisor.
When is it mandatory for commercial companies to have a legal advisor?
Commercial companies are required to have a legal advisor when:
- Their capital is equal to or greater than 300,000.00 euros.
- Their normal business volume reaches the figure of 600,000.00 euros.
- Permanent staff exceeds 50 employees.
- If companies are domiciled abroad, it will be necessary when their volume of operations or business in the branches they have in Spain is equal to or greater than 300,000.00 euros; or when their permanent staff exceeds 50 employees.
What are the functions of a legal advisor?
The legal advisor monitors and advises on the decisions taken at the meetings of the Board of Directors. Mainly, the advisor focuses their activity on advising on commercial and civil contracts.
- In corporate matters, the legal advisor must advise on the structure of corporate capital and corporate management.
- In administrative matters, the advisor keeps the shareholders’ registry books and the minutes book and, lastly, formalizes and registers the agreements in the Commercial Registry.
What is a Board Secretary?
The Secretary of the Board of Directors guarantees the appropriateness of procedures, as well as compliance with the established regulations. It is therefore their responsibility to ensure that the Board’s actions comply with the applicable regulations and are in accordance with the Company’s bylaws and other internal regulations.
In addition, the Board secretariat facilitates the smooth running of Board meetings and prepares the agenda.
Their two most important functions are:
- Advising the Board of Directors on all legal matters
- Managing the official books and minute books
In some cases, the Board resolutions are also recorded in the public registers at the Board’s secretariat.
Depending on the situation, the secretary may or may not be a member of the Board.
Frequently Asked Questions about Board Secretariat and Legal Advisor
A legal advisor ensures the appropriateness of procedures and compliance with regulations established in connection with the activities of the Board of Directors.
The risks of not having a legal advisor are an increase in the risk of attribution of the responsibility of the administrators and in the classification of guilty bankruptcy. However, their usefulness resides mostly in their providing evidence in favor of the acquittal of the administrators.
First of all, it should be clarified that the legal advisor themselves may assume the role of counselor or Secretary of the Board of Directors. Or not being a member of the Board, but rather a legal advisor, under the contractual regime that the parties deem appropriate, whether labor-related or commercial.
In our case, the service we offer is to act as legal advisor or Board Secretary. However, for reasons of responsibility, we do not do so as members of the Board.
The counselor is appointed by the Council, normally a practicing attorney. It is usual that the function of the secretary be performed by a legal person: for example, the law firm A2ym Legal of the UR Global group.