Government approves new economic measures against coronavirus

The Council of Ministers yesterday approved a Royal Decree-Law on urgent extraordinary measures to deal with the economic and social impact of the COVID-19. This regulation reinforces the initiatives implemented in the plan of exceptional measures agreed last Thursday.

Guarantees of liquidity to sustain economic activity:

The RD has approved the following measures aimed at guaranteeing the liquidity required to sustain the economic activity:

A line of guarantees has been approved for financing granted by credit institutions to companies and the self-employed for a maximum amount of
The applicable conditions and requirements to be met must be established by agreement of the Council of Ministers, which is still pending. Consequently, the requirements for accessing this aid are not known at this time.
It has been agreed to extend the ICO’s net debt limit by 10 billion in order to provide additional liquidity to companies through ICO lines of financing through the intermediation of financial institutions.
It is expected that the ICO will take measures to make the financing available more flexible and expand it and to improve access to credit for companies “while preserving the necessary financial balance provided for in its statutes”. Consequently, as in the previous case, the requirements for access to this aid are not known at present.
The creation of an insurance coverage line of up to 2 billion euros to be charged to the Internationalisation Risk Reserve Fund for SMEs with a maximum duration of 6 months has been authorised. The beneficiaries are SMEs in which (i) international business represents at least 33% of their turnover or which are regular exporters (companies that have exported regularly over the last four years in accordance with the criteria established by the Secretary of State for Trade) and (ii) are in a liquidity problem as a result of the impact of the COVID19 crisis on their economic activity.

Extraordinary measures applicable to legal persons governed by private law.

They will be held by videoconference during the alarm period and even if the statutes had not foreseen it:
- the meetings of the governing and administrative bodies of associations, civil and commercial companies, the board of directors of cooperative societies and the board of trustees of foundations. Provided that the authenticity and the bilateral or plurilateral connection in real time with image and sound of the remote attendees is ensured.
- the same rule shall apply to the delegated committees and other compulsory or voluntary committees that may have been set up. The meeting shall be understood to have been held at the domicile of the legal entity.
They may be adopted by written vote and without a meeting, even if the statutes had not foreseen it and during the alarm period:
- the resolutions of the governing and administrative bodies of the associations, of the civil and commercial companies, of the governing council of the cooperative societies and of the board of trustees of the foundations, provided that it is decided by the chairman and requested by at least two of the members of the body.
- the same rule shall apply to the delegated commissions and other obligatory or voluntary commissions that may have been set up. The meeting will be understood to be held at the company’s headquarters. The provisions of article 100 of Royal Decree 1784/1996, of 19 July, approving the Regulations of the Commercial Registry, will apply to all these resolutions, even if they are not commercial companies.
This regulation reinforces the initiatives implemented in the plan of exceptional measures agreed last Thursday. The period of three months from the end of the financial year for the governing body or administration of a legal entity to formulate the annual accounts, ordinary or abbreviated, individual or consolidated, and, if legally required, the management report, and to formulate other documents that are legally required by company law, is suspended until the end of the state of alert. The period will resume again for another three months from the end of the state of alert.
In the event that, on the date of the declaration of the state of alert, the governing body or administration of an obligatory legal entity has already drawn up the accounts for the previous financial year, the period for the accounting verification of these accounts, if the audit is obligatory, will be understood to be extended by two months from the end of the state of alert.
The Ordinary General Meeting to approve the previous year’s accounts will necessarily meet within three months from the end of the period for preparing the annual accounts.
If the notice of the general meeting has been published before the declaration of the state of alarm but the day of the meeting is later than that declaration, the administrative body may change the place and time set for the meeting or revoke the resolution to call the meeting by means of a notice published at least forty-eight hours in advance on the company’s website and, if the company does not have a website, in the “Official State Gazette”. In the event of revocation of the resolution to call the meeting, the administrative body must call the meeting again within the month following the date on which the alarm condition ended.
The notary required to attend a general meeting of shareholders and to take the minutes of the meeting may use remote communication means in real time to adequately ensure the fulfilment of the notary function.
Even if there is a legal or statutory cause, in the capital companies the partners cannot exercise the right of separation until the end of the alarm state and its extensions, if any, are agreed.
The reimbursement of contributions to cooperative members who leave during the validity of the alarm state is extended until six months after the end of the alarm state.
If, during the period of validity of the state of alarm, the term of duration of the company established in the articles of association expires, the dissolution will not take place with full rights until two months have passed since the end of the state of alarm.
If, before the declaration of the state of alarm and during the validity of that state, there is a legal or statutory cause for the dissolution of the company, the legal period for the convocation by the administrative body of the general meeting of shareholders to adopt the agreement to dissolve the company or the agreements that have the purpose of enervating the cause, is suspended until the end of that state of alarm.
If the legal or statutory cause for dissolution has occurred during the state of alarm, the administrators will not be liable for the social debts incurred during that period.

Extraordinary measures applicable to the operation of the governing bodies of listed companies

Exceptionally, during the year 2020, the following measures will be applied to companies with securities admitted to trading on a regulated market in the European Union

The obligation to publish and send their annual financial report to the CNMV and the audit report of their annual accounts may be fulfilled up to six months after the end of the financial year. This period will be extended to four months for the publication of the interim management statement and the half-yearly financial report.
The ordinary general meeting of shareholders may be held within the first ten months of the financial year.
The board of directors may provide in the notice of the general meeting for attendance by telematic means and remote voting under the terms provided for in articles 182, 189 and 521 of the Spanish Companies Act, Revised Text approved by Royal Legislative Decree 1/2010 of 2 July, as well as the holding of the meeting anywhere in Spain, even though these matters are not provided for in the articles of association. If the notice of meeting has already been published on the date of entry into force of the Royal Decree-Law, any of these cases may be provided for in a supplementary announcement to be published at least five calendar days before the date scheduled for the meeting.
In the event that the measures imposed by the public authorities prevent the general meeting from being held in the place and physical location established in the notice of call and the option provided for in the previous number cannot be used:
- if the meeting has been validly constituted in that place and venue, it may be agreed by the meeting to continue the celebration on the same day in another place and venue within the same province, establishing a reasonable period of time for the transfer of those attending.
- if the meeting cannot be held, the holding of the meeting at a later date may be announced with the same agenda and publicity requirements as the meeting not held, at least five days before the date set for the meeting. In this case, the administrative body may agree in the supplementary announcement to hold the meeting exclusively by telematic means, i.e. without the physical attendance of the shareholders or their representatives, provided that the possibility of participating in the meeting by each and every one of these means is offered:
  1. telematic assistance;
  2. representation conferred on the Chairman of the Meeting by means of remote communication and
  3. early voting through remote communication means.

Any of these forms of participation in the meeting may be arbitrated by the directors even if it is not provided for in the company’s bylaws, provided that it is accompanied by reasonable guarantees to ensure the identity of the subject exercising his or her voting rights. The directors may attend the meeting, which shall be deemed to be held at the registered office regardless of the location of the Chairman of the Meeting, by audio or video conference.

Exceptionally, and for the purposes of the provisions of the previous section, the resolutions of the Board of Directors and the resolutions of the Audit Committee which, where appropriate, must be reported in advance, shall be valid when they are adopted by videoconference or multiple telephone conference, although this possibility is not contemplated in the Articles of Association, provided that all the directors have the necessary means to do so and the Secretary recognises their identity, which must be expressed in the minutes and in the certification of the resolutions issued. In this case, the meeting will be considered as a single one and held at the place of the registered office.

Suspension of the expiration period of the register entries during the validity of the royal decree declaring the state of alarm.

The following measures will be adopted during the state of alert and, if appropriate, any extensions to it that may be agreed:

The period of expiry of the presentation entries, preventive notes, mentions, marginal notes and any other registry entries that may be cancelled due to the passing of time is suspended.
The calculation of the terms will be resumed the day after the end of the alarm state or its extension if applicable.

Time limit for the duty to apply for bankruptcy.

Article 5 of the Bankruptcy Law establishes the legal duty to apply for a declaration of bankruptcy within a maximum period of two months from the time when the insolvency situation became known or should have become known.

While the state of alarm is in force:

The debtor who is in a state of insolvency will not be obliged to apply for a declaration of bankruptcy.
Those who have submitted the communication provided for in Article 5 bis of the Bankruptcy Law (“pre-competition”), will not have the duty to apply for the declaration of bankruptcy either, even if the deadline for doing so has expired.

While the state of alert is in force and until two months have elapsed since the end of the same, applications for the necessary tender will not be admitted.

The Royal Decree-Law entered into force on the same day as its publication in the “Official State Gazette”. The measures will remain in force for a period of one month from their entry into force, without prejudice to the possibility of their duration being extended by the Government by means of a Royal Decree-Law following an assessment of the situation. Notwithstanding the above, those measures provided for in the Royal Decree-Law that have a fixed term of duration shall be subject to it.