Since October 19, Law 18/2022 of September 28, better known as the Crea y Crece Law, on the creation and growth of companies, will come into force. It seeks to simplify the procedures when setting up companies (it will be possible to create a company with a share capital of 1 euro).
Objectives of the Crea y Crece Law
This new regulation (Crea y Crece Law) was created to improve the business sector by fulfilling the following objectives:
- Boost the creation of companies, facilitating and making the incorporation process more flexible in both its economic aspects (capital amount) and formal aspects (incorporation procedures).
- Encourage the increase in business size, i.e., the growth of the company, for which purpose actions of different dimensions are introduced in all phases of the company’s life cycle, such as the reduction of regulatory and administrative obstacles, financial support for its growth, making more flexible alternative financing mechanisms like crowdfunding, collective investment, venture capital and the fight against late payments in commercial operations.
Limited Liability Companies with 1 euro of share capital
From now on it will be much easier to incorporate a Limited Liability Company. The law reduces the formalities to incorporate this type of company, so they can be incorporated with a share capital of 1 euro. However, as long as the figure of 3,000 euros is not reached, they are subject to a special regime:
- At least 20% of the profit must be allocated to the legal reserve until said reserve, combined with the share capital, reaches 3,000 euros.
- In the event of liquidation, whether voluntary or compulsory, if the company’s assets are insufficient to meet the company’s obligations, the shareholders will be jointly and severally liable for the difference between the amount of 3,000 euros and the amount of the subscribed capital.
As a consequence of the elimination of the minimum capital stock by the Crea y Crece Law, the Sociedad Limitada de Formación Sucesiva (SLFS), which previously allowed the incorporation of companies with a capital lower than the legal minimum (3,000 euros), is repealed.
Note: Existing SLFS can choose to be subject to the new regime or to abide by the regime of the repealed LSC art.4 bis.
On the other hand, the Crea y Crece Law will also replace the Sociedad Limitada Nueva Empresa (SLNE), which was a simplified subtype of SRL with which it was intended to promote the creation of companies.
Promotion of the telematic incorporation of LLCs
A Limited Liability Company can be incorporated by two different procedures:
- In-person.
- Telematically through the Service Points for Entrepreneurs (Puntos de Atención al Emprendedor or PAE), by using the Single Electronic Document (Documento Único Electrónico or DUE) and through the telematic processing system of the Information Center and Company Creation Network (CIRCE).
Telematic incorporation of LLCs
Obligations for notaries:
- They have to inform the founding partners about the advantages of using the Service Points for Entrepreneurs (PAE) and CIRCE’s electronic headquarters, for the incorporation of the company and other formalities linked to the beginning of their activity (tax and labor obligations, licenses).
- They must be available in the Notarial Electronic Agenda (as already required by RD 421/2015 art.8) and in readiness to incorporate an LLC through CIRCE, not being able to reject, unless there is a justified cause, any incorporation procedure initiated through the CIRCE system and the Single Electronic Document (DUE).
Regarding the incorporation of an LLC by means of a public deed in a standardized format with standard bylaws, apart from being able to use models in the co-official languages of the different autonomous communities, the publication of the company’s registration in the BORME is exempt from fees.
On the contrary, concerning the incorporation of a Limited Liability Company by means of a public deed with a standardized format without bylaws, these changes take place:
- The definitive registration must be made within 5 days from the filing entry or, if applicable, of the correction (previously it was within the ordinary period of 15 days).
- Required implementation in each Commercial Register of remote customer service regarding the registration of lawful clauses or statutory agreements.
Creation of an Observatory against defaulting
In order to fight against late payments, with the Crea y Crece Law, companies will be obliged to issue electronic invoices for all commercial transactions made. This will facilitate the traceability of payments and will make it possible to obtain verified information on payment deadlines.
This measure is linked to the creation of a State Observatory of Private Defaulting, which will analyze and closely monitor the data on payment terms, will also promote good practices and will publish annually a list of defaulting companies.
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