July: a month for investment rounds, filing accounts and tidying up the house

July: a month for investment rounds, filing accounts and tidying up the house

Summer arrives, and it’s a time for reflection and evaluation of the first half of the year, or it will be when July ends. The end of July is always a complicated month for lawyers because clients always want to go on vacation with their tasks completed.

It’s a month where investment rounds are executed, or rather, where investment rounds close, often through convertible notes maturing on July 31, 2024.

Often, the goal is to increase the runway, which means the period during which the company has enough cash to handle the summer with ease. Towards the end of the year, all indicators suggest that both the investment and the amount invested in the entrepreneurial ecosystem will increase.

Aside from investment rounds, August is a very good month for housekeeping. Often, in the day-to-day operations, we forget about the corporate obligations that the company must fulfill. Most companies present their annual accounts, but what about the corporate books?

We must remember that companies must always keep the partners registry book and the corporate minutes books updated.

The partners registry book is the document, which nowadays can be digital, that establishes who the shareholders of the company are, what shares they hold, and how they acquired them, thus determining the past and present of the company in writing.

It is important that this register is kept up to date and includes essential information about the shareholder. For instance, meeting notices are sent to the addresses listed in this register. Shareholders have the obligation to keep their information updated by communicating any changes to the company’s management body.

The company is required to present the partners registry book to the relevant commercial registry whenever there is a modification.

The minutes book records the minutes of shareholder meetings and, if applicable, the meetings of the company’s management body. Companies are obligated to hold an ordinary meeting to approve the annual accounts and to hold extraordinary meetings that the management body or a significant percentage of the share capital deem necessary for the proper functioning of the company.

The summary of these meetings will be recorded in writing by the secretary and approved by the president. Reviewing and updating this documentation not only helps comply with applicable legislation but also allows you to reflect on your company. Ultimately, you can assess the company’s progress from a corporate perspective and evaluate the decisions made so far.

Additionally, we recommend reviewing the deeds signed during the year. Often, changes in the management body are not formalized, or capital increases are not registered. It’s important to remember that certain actions require not only public deeds but also registration in the relevant commercial registry. Therefore, keep your deeds well-organized and verify their registration when necessary. A small reminder: submitting to the registry does not equate to being registered, so always verify the registration of what has been submitted.

Furthermore, it might be a good time to evaluate if your documents or website comply with data protection regulations. You would be surprised how often we find references to the Organic Law 15/1999 of December 13, on the Protection of Personal Data, which was repealed by a law in 2008! Or if you comply with the legislation regulating cookies.

This exercise can help prepare and protect your company for the new activity that predominantly starts in September.