Notarial policies

The notary fees are those established in the Decree of December 15, 1950 on Fees for Exchange and Stock Exchange Agents and Commercial Brokers. The tariff of the Brokers of Commerce was respected and was integrated in the notarial tariff when the merger between both bodies took place.

Notaries are obliged to scrupulously respect the tariff approved by law in the exercise of their functions. Also covered by said law are the fee reductions (or discounts) allowed.

The commercial policy does not require the unity of the act. This means that the contracting parties may sign at different times, and may even sign the same document in different notary offices (which is known as partial intervention) by means of the unfolded policy system. But both parties must always sign in the presence of a Notary, who reads and explains its contents and clarifies the doubts of the intervening parties.

The split policy system, requiring the intervention of two different notaries, imposes a higher economic cost. In order to avoid this additional notarial cost due to the intervention of two notaries on the same document, the DGRN (Dirección General de Registro y Notariado) has established that the notary that collects the signature of the client (i.e., the individual or company) must charge the notary fees for his intervention. The notary who intervenes in the signature of the Bank must limit himself to charge the minimum required by law for documents without amount (30,05€).

Said information is available in the consultation made before the General Directorate of Registries and Notaries, file number 208-12N, dated October 8, two thousand fourteen.

• Fixed interest, constant throughout the life of the chosen financing contract (e.g. loan, credit, discount, factoring, etc.).
• Variable interest, defined by a reference interest rate plus a spread. The reference rate commonly used by financial institutions is the EURIBOR (European interbank offered rate).

• Initial costs: the financial institution usually charges an arrangement fee and a study fee at the beginning of the financing.
• Formalization costs: the expenses derived from the notary's intervention (which we explain in detail how they are calculated in the section on frequently asked questions).
• Periodic costs: the interest paid to the entity for financing us.
• Costs for modification of conditions: the financial entity usually charges a commission in case of variation or renegotiation of the conditions. Any modification must also be formalized before a notary and will accrue the corresponding fees.
• Final costs: any early redemption or cancellation fees.

When looking for external financing we have to bear in mind all these costs, since all of them are agreed and fixed in writing in the chosen financing contract, which is notarized. Precisely, the notary at the time of signing, reviews with the debtor each and every one of the costs.

It should be noted that any of the financing contracts described above, which may be notarized, require a study of the specific transaction by the risk committee of the financial institution, and usually require the provision of guarantees to cover the possibility of non-payment by the debtor.

• Real guarantee: that is to say, to offer a movable or immovable property that guarantees the success of the operation. IT IS VERY IMPORTANT TO BE CLEAR that when in a financing contract a real estate guarantee is provided, this contract cannot be intervened in notarial policy, it must be formalized in public deed (e.g. a mortgage loan).
• Personal guarantee: that is to say, to offer the solvency of the debtor himself by withholding his money invested in funds, deposits or shares; or to offer as guarantee the solvency of a third person other than the debtor who acts as guarantor or surety. The personal guarantee par excellence is the figure of the GUARANTOR or GUARANTOR. Therefore, it is important to be clear that when someone guarantees or vouches for another:
• ~You are responsible for the payment of the loan with all your assets and income, both present and future.
• ~The financing contract (e.g. the loan) can be extended without the guarantor's authorization.
• ~The amount guaranteed shall be the amount designated in the policy, including principal and interest and other expenses.

It is a contract whereby the financial institution makes funds available to the company or individual up to a certain limit, articulated in a current account. For its part, the company or individual undertakes to pay periodic interest on the amounts drawn and to repay the principal at the end of the agreed term of the contract, normally within a period not exceeding one year. In this type of contract, financial institutions may also charge interest on undrawn amounts. One of the main differences with the loan. The credit account is of great importance for companies and professionals because they can coordinate their flows of collections and payments, thus avoiding their lack of liquidity, which can cause certain problems in the business. By means of this type of account, where its balance will depend on our financing needs, we can set up direct debits for all types of payments and collections during its term.

<ejemplo>Ejemplo: “un despacho de abogados que todos los meses tiene unos gastos fijos mensuales entorno a los 50.000 €. Esos gastos se han costeado desde el principio gracias a las aportaciones iniciales de los socios fundadores. Sus socios, una vez estabilizado el despacho en cuanto a ingresos y gastos, deciden solicitar la apertura de una cuenta de crédito a nombre del despacho de 50.000 € para ir sufragando dichos gastos fijos mensuales y obtener la liquidez necesaria para poder recuperar así las aportaciones iniciales”.<ejemplo>

The credit is an operation designed for a short term, frequently between 6 months to a year. Although after this time it can be renewed as long as our situation has not changed with respect to the initial circumstances. The great advantage of the credit account is its flexibility, how easy it is to dispose of the funds. The credit account, together with the loan (explained above), are the two most frequent forms of external financing in practice. Their main difference with the loan is that while the loan is always linked to a purchase or service transaction, the loan is always linked to a purchase or service transaction.

<ejemplo>Ejemplo: “pido dinero prestado para reformar el despacho y necesito disponer de todo el dinero desde el momento inicial”.<ejemplo>

In credit there is no linkage to a purpose, i.e., they are transactions where the acquisition of a specific good or service is not financed, but we obtain money to be used in a specific way, but we do not know at what time.

<ejemplo>Ejemplo: “tener domiciliados todos los gastos del negocio (luz, agua, gas, proveedores, etc.) es una cuenta bancaria de crédito”.<ejemplo>

This is a contract whereby the financial institution advances the company the amount of unmatured bills of exchange received from customers, bills of exchange that recognize a payment obligation (e.g. bills of exchange, promissory notes, checks, checks, checks, etc.). The entity deducts from the nominal amount of the bills of exchange the interest due for the time between the date of the advance and the maturity date of the bills, as well as the expenses and commissions arising from the discounting operation. The financial institution manages the collection of the advanced bills of exchange at maturity, but does not assume the risk of non-payment if the debtor does not pay them, exercising the recovery action against the company.

A trade discount always involves 3 parties:

• CLIENT: the company or self-employed person who contracts the services of the financial institution and seeks to advance one or more credits.
• FINANCIAL ENTITY: entity that is in charge of advancing the payment of its customer's outstanding receivables.
• DEUDOR: suelen ser los proveedores del cliente que emiten el crédito (pagares, recibos, letras de cambio o facturas) por haber recibido productos o servicios de él.
  
  <ejemplo>Un ejemplo: “el carpintero, que trabaja como autónomo, su cliente principal es una empresa de interiorismo con gran actividad. Cobra habitualmente de dicha empresa mediante pagarés a 60 días. Esa forma de pago al carpintero no le viene bien (pues debe afrontar mensualmente muchos gastos derivados de la marcha de su propio negocio como pagar su cuota de autónomos, obligaciones fiscales, alquiler de su local, pago de nóminas de personal, proveedores, etc.). Por eso acude a la entidad financiera para que esta le anticipe el importe de sus pagarés a 60 días que todavía no han vencido”.<ejemplo>

The key advantages of trade discounting are:

• provide liquidity to companies or the self-employed without having to wait for their loans to mature.
• eliminates administrative costs derived from collection management.

It is a contract whereby the financial entity offers a company its services of insolvency coverage, collection management and financing applicable to credit sales made to its customers, both domestic and foreign. Therefore, in a factoring operation its components are always:

• TRANSFEROR COMPANY: requests the operation to the financial entity and transfers its invoices representing its short-term sales, up to 270 days.
• FACTOR or FINANCIAL ENTITY: advances the money to the transferor company, manages the collection of the debt and offers to cover the risk of possible insolvency of its customers and to meet specific liquidity needs.
• DEUDORES DE LA EMPRESA: son los clientes compradores de la empresa cedente. Están obligados a pagar las deudas que han sido cedidas directamente a la entidad financiera o factor.
  
  <ejemplo>Un ejemplo: “Cuando una empresa realiza numerosas ventas a crédito a sus clientes, tiene que añadir a su actividad productiva las siguientes preocupaciones: gestionar y cobrar las facturas emitidas, cubrir el riesgo de posibles insolvencias de sus clientes y atender necesidades de liquidez puntuales, debido al dilatado plazo de pago de sus ventas a crédito. La entidad financiera, a cambio de un interés, ofrece de forma especializada toda una serie de servicios dirigidos a que una empresa pueda cobrar sus facturas, puntualmente, evitar la morosidad y ahorra a la propia empresa la inversión en tiempo y recursos humanos que le supone tener que hacerlo ella”.<ejemplo>

These services are offered on the basis of the "commercial assignment" of the invoices pending collection to a financial entity so that it may provide one or more of the following services:

• administration and classification of the assignor's client portfolio;
• invoice collection management;
• financing of working capital through financial advances on assigned invoices;
• guarantee in case of debtor insolvency.

The advantages of factoring are numerous for the ceding company:

• time and cost savings;
• allows for maximum mobilization of the debtors' portfolio and guarantees the collection of all debtors;
• write-off of the customer portfolio;
• allows to receive advances on assigned receivables;
• can be used as a source of financing and obtaining current resources, etc.

It is the contract by which the financial entity manages a company's payment to its suppliers, offering them the possibility of collecting the invoices before the due date. It is a source of financing for the company (postponing the payment of debts) and for the suppliers (anticipating the collection of the same). It is a widespread service among large companies that consists of confirming to a financial institution the payments to be made in the future, so that the financial institution can contact the party entitled to collect the confirmed invoice and propose early payment of the same.

<ejemplo>Un ejemplo: “una empresa constructora de gran reconocimiento profesional y reconocida solvencia, tiene un calendario de pago a sus proveedores muy alto (entre 90 y 180 días) desde que acepta la mercancía. Esta situación para la entidad financiera de gestionar los pagos de la empresa con sus proveedores se convierte en una fuente de negocio interesante; por un lado, puede financiar a la empresa constructora en el momento del vencimiento del pago y, por otro lado, puede ofrecer a los proveedores de ésta la posibilidad de anticipar el cobro de sus facturas”.<ejemplo>

Once the contract is signed and the company has guaranteed the average volume of payments assigned to the financial institution, the operation of this form of financing is simple:

• The company receives invoices from its suppliers, confirms them and notifies the financial institution;
• The financial entity receives confirmation from the company of the invoices detailing the amount and date of payment settlement;
• The financing entity contacts the supplier informing him that his invoice is confirmed to be paid on a certain date but that if he wishes, he can advance payment of the invoice;
• If the supplier accepts the conditions of the advance payment (i.e. the commission of the financial institution for the advance payment) he can collect the invoice at that time by bank transfer to an account of his choice. If the supplier is not interested in the advance payment he will receive a promissory note with the due date stated on the invoice.

As far as costs are concerned, we must distinguish:

• The costs borne by the confirming company are:
• ~Initially the guarantee of the payments assigned to the entity upon signing the contract;
• ~Notary fees for the intervention of the policy;
• ~Periodically, interest accrued as a result of the possible financing of payments made at the time of maturity thereof.
• The costs borne by the supplier would be only in the case of accepting prepayment of your invoice.

Finally, regarding the advantages of this figure:

• For the confirming company: avoid calls from suppliers to inquire about the collection status of their invoices, retains the initiative in payment, concentrates cash management, can request financing for such payments, etc.
• For the supplier to ensure the collection of the invoice once it has been confirmed, to obtain a line of financing that allows him to advance the collection of invoices, etc.

Renting is a contract whereby the financial institution undertakes to make an asset available to the customer on a lease basis for a specified period of time. On the other hand, the customer is obliged to pay a periodic rent, which includes the use of the asset, as well as maintenance and insurance costs to cover possible claims. Renting is therefore a formula that combines financing with the contracting of services. It is advisable to use it to access state-of-the-art computer equipment, as well as transportation equipment, which is characterized by rapid wear and tear or disuse.

<ejemplo>Un ejemplo: “una empresa tiene que actualizar toda su red informática pues la misma se encuentra totalmente desactualizada. La empresa selecciona los equipos e instalación que precisa para su funcionamiento. La entidad financiera adquiere los equipos seleccionados al proveedor y contrata tanto el mantenimiento como el seguro del mismo. En esta situación, la entidad financiera pone los equipos y su instalación a disposición de la empresa solicitante mediante la firma del contrato de renting. La empresa solicitante se compromete a abonar a la empresa de renting cuotas periódicas de alquiler pactadas en el contrato durante el plazo de tiempo definido en el mismo”.<ejemplo>

The main advantages of leasing are, among others:

• Allows access to assets without the need to make an initial disbursement or apply financial resources to the operation;
• In the case of a company, the rental fee paid is fully tax deductible for corporate income tax purposes, etc.

On the contrary, the great disadvantage of "renting" is that there is no purchase option in favor of the lessee of the equipment since it is not owned by the lessee. This disadvantage of renting is the main difference with the leasing contract discussed below.

It is a guarantee contract whereby the financial institution covers the customer's financial obligations, acting as guarantor for that person. A guarantor functions as a guarantee in the event of a possible breach of an economic obligation. It works as an insurance, that is to say, the financial entity responds for the person to whom it guarantees, therefore, in case this one does not pay, the financial entity (the guarantor) will have to take charge of the financial obligations.

<ejemplo>Un ejemplo frecuente de aval bancario “tiene lugar a la hora de alquilar un piso, donde el propietario, en muchas ocasiones además de la fianza correspondiente, exige al inquilino a la hora de firmar el contrato de arrendamiento que le entregue un aval bancario que le garantice el pago de varias mensualidades”.<ejemplo>

In order to grant the bank guarantee, the financial entity will demand a counter-guarantee from the guaranteed person (in our example the tenant) in exchange for a counter-guarantee that must be complied with in order to obtain the guarantee. This counter-guarantee required by the bank usually consists of:

• To deposit an amount identical to the amount of the guarantee and leave it immobilized;
• Pledge funds, deposits or shares of the applicant of the guarantee for an amount similar to the amount of the guarantee;
• Etc.

Therefore, it should be borne in mind that the main direct beneficiaries of a bank guarantee are always the following:

• The person or company that contracts with the guaranteed person;
• The financial entity, which offers itself as guarantor or guarantor, since it requires a counter-guarantee from the guarantor in advance and will also charge interest for it.

In short, the bank guarantee does not present any advantage for the person who contracts it.

1. Study commission: The study commission remunerates the entity for the study or analysis of the risks of a transaction. It is usually a percentage of the amount of the transaction, with a minimum.
2. Arrangement fee: the arrangement fee rewards the institution for the administrative steps taken to formalize a transaction. It is usually a percentage of the amount of the transaction, with a minimum.
3. Early cancellation fee: This fee rewards the administrative procedures corresponding to the actions that the entity must carry out to terminate a transaction that had a defined term of duration before the maturity date agreed in the contract. It compensates the entity for what it ceases to earn by not being able to continue charging interest or commissions for the risk it was assuming during the period of time in which the operation was active. For credits and loans to consumers subject to Law 16/2011, on consumer credit contracts, if we cancel or repay the loan early, the bank may charge compensation for early cancellation or repayment, provided that it occurs in a period in which the borrowing rate is fixed and up to 1% of the amount repaid, if the remaining period between the early repayment and the termination of the credit is more than one year, up to 0.5% of the amount repaid early if that period is less than one year. It will never exceed the amount of interest you would have paid during the period of time between the early repayment and the agreed date of termination of the credit.
4. Unavailability fee: in the event that the company has not needed to use the full amount granted, a fee may also be applied for the undrawn balance.
5. Fee for modification of conditions or guarantees: The commission for modification of conditions or guarantees rewards both the procedures that the entity must carry out when the content of the contract is modified, and the risk analysis that such modification may entail for the entity. It may be a fixed amount, a percentage of the outstanding amount of the transaction or, if there is an increase in the amount or risk of the transaction, it may be linked to the additional amount.
6. Commission for claiming debtor positions: The commission for claiming debtor positions compensates the entity for the effective steps taken to recover the debt unpaid by its client. In any case, it must be included in the contract. And in accordance with good banking practices:

• ~The accrual of the commission is linked to the existence of effective complaint procedures carried out with the debtor customer.
• ~The commission cannot be reiterated in the claim of the same balance for additional steps taken by the entity for the same purpose, not even when, in the case of non-payment over time, this is prolonged in successive settlements.
• ~Its amount must be unique, not admitting percentage rates.
• ~It cannot be applied automatically.

The interest rate is the "price" your lender charges for lending you money. It is a percentage of the capital pending repayment. The interest rate that will be applied to your loan, which has no limits for its establishment, will be the one that you have agreed in the contract and can be fixed or variable.

• Fixed: it remains constant throughout the life of the contract so there is no uncertainty about the amount of future installments. In fixed-rate loans, the interest rate is usually higher than variable-rate loans.
• Variable: the rate is modified throughout the life of the loan according to the evolution of the index taken as a reference and is usually expressed as the sum of the index and a constant percentage.

Before deciding on one offer or another, compare their conditions and in particular, in variable interest loans, take into account the reference index chosen and the differential or margin applied.

The term is the time during which you will be paying the installments. In personal loans it is usually less than that of mortgages, and will depend, among other factors, on the amount requested and the asset you want to acquire. The term of personal loans can be freely agreed upon. It should be borne in mind that the longer the term, the lower the installments to be paid, provided that the other conditions of the loan remain constant. When choosing the term, bear in mind that:

• The longer the term, without changing the other conditions of the loan, the lower the installments will be, but the total interest will be higher.
• If you take out a variable interest rate loan, the longer the term, the greater the likelihood of interest rate variations.

At the time of contracting, you may agree to an initial grace period, during which you will pay a lower installment, but keep in mind that:

• If you pay interest only, the monthly payment is reduced, but the principal amount borrowed will not decrease during the grace period.
• If you pay neither interest nor principal, interest will accrue and principal will grow.

In this case, the Law also provides for the obligation to identify the natural persons who directly or indirectly legally represent the legal entity, i.e., it is necessary to identify all those persons who are part of the administrative body (Article 4.2.b).

The obligation to identify the real ownership is carried out by means of a deed of manifestations signed before a Notary Public in which the person appearing states who is the true real owner of the company.

In order to formalize the deed, the following documents must be presented at the Notary's office: the deed of incorporation of the company, the deed of appointment of the representative who is requesting the deed and the identification of the natural person/s who hold the real ownership of the company (name, surname/s and DNI, NIE or passport number).

A certificate with three sheets of State stamped paper, which is the normal length, costs approximately 50 to 60 euros (VAT included).

No. It will not be necessary to make this declaration when the transaction is for no amount or for an amount of less than 15,000 Euros, provided that, in the opinion of the Notary Public, there is no risk indicator. Nor will it be necessary in the case of public law entities of the States of the European Union or equivalent third countries, companies or other legal entities controlled or majority owned by public law entities of the same States and financial entities, except payment institutions, domiciled in the same States.

Once the notarized certificate of manifestations of the beneficial owner has been made, it will be used for all future operations granted by that company, unless there is a variation in the indicated percentage of 25% of its shareholding, in which case it will be necessary to update it.

The aforementioned Law 10/2010 obliges Notaries (Article 2.1.n) to take appropriate measures in order to verify the identity of the beneficial owner prior to the establishment of business relationships (Article 4.1 of the Money Laundering Law). Otherwise, the notary must refrain from authorizing the document and deny the notary public faith.

The intervening party is guilty of the crime contemplated in Article 239 of the Criminal Code: "Ideological forgery by a private individual. Whoever, on the occasion of the granting or formalization of a public document, before a public official, provides a false statement about his identity or status, or any other factual circumstance, shall be punished with three to twenty-four months imprisonment".