{"id":16519,"date":"2025-07-14T09:37:43","date_gmt":"2025-07-14T09:37:43","guid":{"rendered":"https:\/\/seegman.com\/legal-status-of-the-individual-representative\/"},"modified":"2025-07-14T09:37:44","modified_gmt":"2025-07-14T09:37:44","slug":"legal-status-of-the-individual-representative","status":"publish","type":"post","link":"https:\/\/seegman.com\/en\/legal-status-of-the-individual-representative\/","title":{"rendered":"Legal status of the individual representative"},"content":{"rendered":"\t\t
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Legal status of the individual representative<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t
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The individual representative of a legal entity acting as a director assumes an organic position with full joint and several liability. This appointment carries significant legal and tax implications, especially in complex corporate structures.<\/em><\/h5>\n

In the field of Commercial Law, the role of the individual representative appointed by a legal entity acting as director of a company has gained increasing relevance. This form of administrative organization is common in complex business structures, such as corporate groups or within the framework of highly specialized professional management services. However, its use raises significant legal challenges, both in commercial and tax matters, warranting detailed attention.<\/p>\n

Article 212 bis of the Capital Companies Act (LSC) allows a legal entity to serve as director of a company, provided it appoints a single individual representative to effectively perform the duties of the role. This appointment must be express, formally accepted, and recorded in a public deed for registration in the Commercial Registry. Furthermore, the appointed representative must meet all legal requirements applicable to any director of the managed company.<\/p>\n

The basis for this requirement lies in the need to ensure stability, operability, and accountability within the management body. Unlike other forms of occasional representation (such as attending general meetings or exercising shareholder rights through a joint ownership entity), the individual representative continuously carries out managerial duties with a clearly organic and executive nature. This explains why the law extends the obligations and responsibilities inherent to the position to the representative, jointly and severally with the appointing legal entity.<\/p>\n

From a commercial standpoint, one of the main challenges is to clearly define the applicable liability regime. Case law and legal doctrine have fluctuated between viewing the representative as a mere delegate of the legal entity or, conversely, as a true responsible party by virtue of assuming the role. The 2014 reform of the LSC settled this debate by establishing that whoever exercises decision-making power must bear the resulting liability, and the legal entity cannot evade this by claiming to have fulfilled its oversight duties.<\/p>\n

In this regard, Article 236.5 of the LSC provides that the individual representative is jointly and severally liable with the legal entity director for acts and omissions in the performance of their duties. This liability should not be understood as stemming from a mandate or delegation relationship, but rather as a direct consequence of accepting an organic position. This view has been affirmed in recent case law, such as the judgment of the Provincial Court of Valencia dated 23 December 2024, which offers a helpful synthesis on the subject.<\/p>\n

In the tax matters, the complexity is similarly notable. The Resolution of the Central Economic-Administrative Court of September 24, 2024 (RG 1354\/2023) clarified that services rendered by the individual representative, when they also serve as a director of the appointing legal entity, cannot be treated as remuneration for a director\u2019s role. Due to the fiscal linkage, such services must be valued at market price in accordance with Article 18 of the Corporate Income Tax Act. This distinction is especially relevant in contexts such as family businesses, where the design of the administrative structure directly affects the taxation of both the entity and the individuals involved.<\/p>\n

Finally, it is important to consider the legal relationship between the individual representative and the legal entity director. This relationship may vary: in some cases, it falls within an employment relationship, while in others it may be of a commercial or professional nature. When the representative is also an executive director within the legal entity, the functions overlap and the responsibility increases accordingly.<\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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More Technical Articles<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

The individual representative of a legal entity acting as a director assumes an organic position with full joint and several liability. This appointment carries significant legal and tax implications, especially in complex corporate structures. In the field of Commercial Law, the role of the individual representative appointed by a legal entity acting as director of […]<\/p>\n","protected":false},"author":2,"featured_media":8575,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"elementor_header_footer","format":"standard","meta":{"footnotes":""},"categories":[99,79,100],"tags":[87],"class_list":["post-16519","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all","category-article","category-corporate-governance","tag-article"],"yoast_head":"\nLegal status of the individual representative<\/title>\n<meta name=\"description\" content=\"The individual representative of a legal entity acting as a director assumes an organic position with full joint and several liability\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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