The Social Division of the Superior Court of Justice of Galicia (TSJG) has resolved by judgment of 16.11.2021 (appeal 2188/2021) the compatibility between the collection of the retirement pension and the condition of partner and Sole Administrator of a commercial company, when the Administrator performs exclusively the functions inherent to the ownership of the company and this does not imply "a dedication of a professional nature".
The judgment analyzes the case of a sole director of a company that owned 75% of the shares of the company he managed.
Once he reached retirement age, the Administrator left the Special Regime for Self-Employed Workers and applied for the retirement pension that the INSS granted him.
However, as a result of various actions carried out by the Labor Inspection, the INSS agreed to revoke this recognition and annul the retirement pension.
When the INSS decision revoking his retirement pension was unsuccessfully challenged, the Administrator appealed to the TSJG.
In its recent ruling, the Social Chamber of the TSJG establishes that the determining factor for compatibility between the receipt of a retirement pension and the status of partner and Sole Administrator of a commercial company is to analyze whether or not the "self-employed partner" is limited to maintaining the ownership of the business.
The magistrates emphasize that in order to be qualified as self-employed "it is not enough to be the owner of a company or business, but it is necessary to perform effective work, in an economic sense, in a habitual and direct manner".
On this point, the TSJG refers to Circular 5-028, dated October 14, 1999, of the TGSS, on the scope of the expression "Functions inherent to the ownership of the business", as well as the Resolution of August 13, 1999, of the DGOSS, on the scope of the expression "functions inherent to the ownership of the business".
In view of the above, the Chamber understands that a distinction must be made between "the exercise of functions inherent to the ownership of the business, among which are those of an administrative nature, relations with official bodies, town halls, taxation, etc., in which the retiree continues to be the owner of the business and, as such, pays taxes, signs contracts, represents the company, etc., from those other activities that involve personally running the business, with physical presence in it throughout the day, office work, office or otherwise, in such a way that only the incompatibility with the payment of taxes is produced, from those other activities that involve personally running the business, with physical presence there throughout the day, office work, office work or other types of work, so that incompatibility with the receipt of the pension only occurs in the second case".
In the case under analysis, the Administrator did not physically act on a daily basis in the company's business, his daughter being in charge of the daily management, assuming "the role of manager or director of the entity while the plaintiff performed functions as administrator", the plaintiff's daughter being the one who "assumed the ordinary management".
Therefore, the Court declares that, at the time of the recognition of his retirement pension, the Director limited himself to maintaining the ownership of the company, performing functions inherent to such ownership, without professional involvement in its performance, which leads the TSJG to the declaration of compatibility between the retirement pension and his status as a director.
