The Law for the creation and growth of companies (“Ley Crea y Crece”), which came into force on October 19, was created with the aim of boosting business dynamism and promoting the creation of companies, fostering their growth through regulatory improvements, the elimination of obstacles to economic activities, the reduction of defaulted payments and financial support for business growth.

1/ MEASURES TO SPEED UP THE CREATION OF COMPANIES, reducing financial cost and the procedures required for their incorporation. To this end:

  1. The possibility of incorporating a Limited Liability Company (SRL) with share capital of 1 euro is established. As long as the capital of a limited liability company does not reach the amount of three thousand euros, the following rules will apply:
    • An amount at least equal to 20 % of the profit must be allocated to the legal reserve, until this reserve, combined with the share capital, reaches the amount of three thousand euros.
    • In the event of voluntary or compulsory 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 three thousand euros and the amount of the subscribed capital.
  1. Likewise, the remote incorporation of companies is encouraged via the Attention Points for Entrepreneurs (“Puntos de Atención al Emprendedor”) and the Information Centre and Business Creation Network (“Centro de Información y Red de Creación de Empresas”). The Ministry of Justice will regulate the deed of incorporation of limited liability companies by ministerial order, with a standardized format and with codified fields for limited liability companies that are incorporated by means of the Single Electronic Document (“Documento Único Electrónico”) and that adopt the board of directors’ formula as their management system.

 

2/ MEASURES TO ENHANCE THE FIGHT AGAINST LATE PAYMENTS in commercial transactions, with a particular focus on SMEs:

    1. The obligation to issue and send electronic invoices in all commercial relations is extended to companies and freelancers.
    2. Companies that do not comply with the payment terms established in the Late Payment Act will not be able to access a subsidy.
    3. Creation of a State Observatory of Private Default: This body will publish an annual list of defaulting companies (legal entities that do not pay more than 5% of their invoices and whose total amount of unpaid invoices exceeds 600,000 euros).
    4. It includes the obligation for large companies to disclose the average length of time they take to pay their suppliers in their annual reports.

 

3/ MEASURES TO IMPROVE INSTRUMENTS FOR FINANCING BUSINESS GROWTH, such as crowdfunding or participatory financing, collective investment and venture capital.

    1. In the field of crowdfunding, the Law adapts national regulations to European regulations, introducing more flexibility for these platforms to provide their services in Europe.
    2. Investor protection is reinforced and the creation of instruments for group investors is allowed in order to reduce management costs. Investment thresholds per project are raised (from 2 to 5 million euros) and investment limits per project for retail investors are modified to 1,000 euros or 5% of wealth, whichever is higher.
    3. The venture capital industry is given more support, with a broadening of the type of companies in which these entities can invest, favouring companies of a highly technological nature.

In conclusion, the Law for the creation and growth of companies establishes an encouraging legal framework for the promotion of entrepreneurship and business dynamism, from which we will surely all benefit, since small and medium-sized companies, together with self-employed workers, make up more than 99% of the production network, representing more than 61% of Gross Added Value and generating 64% of employment.