New law on the promotion of the entrepreneurial ecosystem of companies
Startup Law as a new measure to help entrepreneurs.
On 23 December 2022, Law 28/2022, of 21 December, on the promotion of the start-up ecosystem (colloquially known as the Startup Law) came into force, which, together with Law 18/2022, of 28 September, on the creation and growth of companies (Crea y Crece Law), which came into force on 28 September, and which we analysed in the October AddNEWS, reinforces support for Spanish entrepreneurs.
Thus, with regard to the commercial sphere, the Startup Law complements the Crea y Crece Law by adopting measures that improve the creation of businesses and companies. The most significant measures with regard to commercial aspects are as follows:
- The deadline for the registration of startups incorporated as limited companies, as well as all their corporate acts, is significantly reduced, leaving it at five (5) working days from the date of the filing entry. This period may be reduced to 6 hours if the company files standard articles of association in accordance with the model to be approved by the Government within 3 months of the publication of the aforementioned law. In addition, the notary and registry fees for such companies, which use the telematic processing system of the Information Centre and Business Creation Network and whose share capital is less than 3,100 euros, will be 60 and 40 euros respectively, and the acts of registration in the BORME will be exempt from fees. It should be recalled that the incorporation of limited liability companies with a share capital of less than €3,000 was introduced by the Crea y Crece Law published last September.
- Start-ups are not subject to dissolution due to losses that reduce the net worth to an amount less than half of the share capital, provided that it is not appropriate to request a declaration of bankruptcy, until three years have elapsed since incorporation. This important measure complements the vacuum left by the Crea y Crece Act, which allowed the creation of limited liability companies with a capital of less than €3,000, and which could easily be dissolved, with the administrative body being jointly and severally liable for the company’s debts if it does not promote such dissolution. With this measure, the company and the management body are given oxygen to structure, plan and develop the company’s activity in order to reap the rewards in the medium to long term.
- The shareholders’ agreements of emerging companies under the limited liability company regime may be registered and will be published in the register, provided that they do not contain clauses that are contrary to the law. Similarly, clauses in the articles of association that include ancillary services on the part of the shareholders may also be registered.
- The general meeting of emerging companies may authorise the acquisition of treasury shares for delivery to directors, employees or other collaborators of the company for the sole purpose of implementing a remuneration plan, provided that the following requirements are met: (i) the treasury stock does not exceed 20% of the share capital; (ii) the remuneration system is provided for in the Articles of Association; (iii) the shares to be acquired must be fully paid up; (iv) the net worth, once the acquisition has been made, may not be less than the amount of the share capital plus any unavailable reserves, legal or statutory, and; (v) the acquisition by the company of the shares must take place within 5 years of the authorisation.
AddVANTE – Baker Tilly stresses the importance of taking appropriate advice before setting up this type of start-up company, as it not only entails the corporate benefits mentioned above, but also the tax and labour benefits discussed by my colleagues at the firm.