The Law that will allow you to create a company with just one euro, fights against late payments and promotes electronic invoicing to make your day-to-day life as an entrepreneur much easier. This is how the new Crea y Crece Law is presented. Do you want to know more and find out how it can help you to carry out your business idea? Then this article is for you!
What is the new Crea y Crece Law?
On July 27, 2021, the preliminary draft of the Crea y Crece Law was launched for public review by the Ministry of Economic Affairs and Digital Transformation. It was then when, in less than a year, this June 30, 2022, it was approved in the Congress of Deputies.
This project has its origin in the recovery, transformation and resilience plan, the roadmap with which the Government of Spain is applying to the European Union for access to European funding, better known as Next Generation. The latter, aimed at boosting economic recovery after the COVID-19 pandemic.
Subsequently, on September 15, 2022, the Congress of Deputies approved the final form of the Crea y Crece Law and on September 29, 2022, Law 18/2022 was published in the BOE.
The Business Creation and Growth Law, better known as the Crea y Crece Law, includes a series of measures and reforms designed to boost business development and promote entrepreneurship in the country.
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Main objectives of the Crea y Crece 2022 Law
Now that you know a little more about the new Crea y Crece Law, we can summarize its main objectives in the following four points:
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Main measures of the “Crea y Crece” Law and its amendments with respect to the Capital Companies Law
Below, we will detail the main measures of this new legislation and its main changes with respect to the Capital Companies Act:
1. New minimum capital in Limited Liability Companies
Article 4 of the LSC was amended, so that now the share capital cannot be less than €1. As long as the company’s capital does not reach the figure previously stipulated by law – €3,000-, the following rules must be applied:
- An amount equal to at least 20% of the profit shall be allocated to the legal reserve until such reserve, together with the capital, reaches the amount of €3,000.
- In the event of liquidation, if the company’s assets are insufficient to meet the company’s obligations, the partners will be jointly and severally liable for the difference between the amount of the €3,000 and the amount of the capital subscribed.
2. Abolition of the successive formation regime
As a consequence of the foregoing, Article 4 bis. LSC is repealed and the possibility of incorporating a company by successive formation is eliminated.
Thus, companies that have already been incorporated under this regime may amend their bylaws, and the rules mentioned in the preceding paragraph shall apply to them.
Those companies that choose not to amend their bylaws will be subject to the transitory provision of the Law.
3. Elimination of the new company limited by shares
The application of the Single Electronic Document, better known by its acronym DUE, facilitates the creation of companies telematically. Thus, its application to the limited liability company, regulated in the third additional provision of the LSC, makes the existence of a new Limited Company unnecessary.
The provisions governing limited liability companies shall apply to these companies already incorporated. As a consequence, all references to this type of company will be repealed.
4. The company creation process will be faster, more agile and telematic.
This new possibility allows entrepreneurs and freelancers to create a company from the comfort of their homes and in approximately ten days. All the steps for its incorporation can be carried out through the Information Center and Business Creation Network (CIRCE).
5. Entrepreneurs will have an insured notary public
In order not to invest too much time in procedures or lengthen them, all notaries will be available in the Electronic Notarial Agency. Likewise, they will not be able to refuse any procedure for the incorporation of SMEs and the same must be initiated through the CIRCE.
6. Mandatory use of electronic invoicing
All transactions between companies and freelancers will require the use of electronic invoices. This is in order to fight against late payment, favor digital transformation and facilitate access to information regarding payment deadlines.
7. There will be restrictions for delinquent companies
Companies that fail to meet payment deadlines will not be eligible for public subsidies or to become a collaborating company in transactions with public administrations.
8. A State Observatory of Private Delinquency will be created.
Six months after the new Law enters into force, the State Observatory of Private Delinquency will be created, which will be in charge of favoring and speeding up the follow-up of payment defaults and the promotion of good practices.
9. The Market Unity Guarantee Law is amended.
The purpose of this is to favor cooperation between Public Administrations and to reduce the formalities and facilitate the claims of companies before Administrations that do not comply with the principles of good economic regulation.
10. New corporate financing instruments
This means that:
- Crowdfunding will be legislated and adapted to European regulations.
- The type of companies in which venture capital entities may invest is expanded.
- The figure of debt funds will be recognized as an extra tool to which SMEs that are in a situation of indebtedness can resort.
When will the new Crea y Crece law come into force in Spain?
The Law for the creation and growth of companies was published in the BOE on September 29 and, therefore, it is expected that its entry will be in twenty days later. That is, on October 19. As from that date, companies will be able to benefit from the specified measures.
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Are you interested in knowing how you can take advantage of the new Crea y Crece Law to carry out your business idea here in Spain? Contact our professionals at TAS Consultancy and they will offer you the most complex advice on legal, tax, accounting and much more. What are you waiting for? Send us an email to email@example.com and we will be glad to assist you.