The “Create and Grow Law” opens the door to the Incorporation of Companies in an agile and low-cost way.14 November 2022
Law 18/2022 of 28 September on the creation and growth of companies will have a major positive impact on the establishment and growth of companies.
Although this law addresses other interesting aspects, such as the elimination of obstacles to economic activities, measures to combat commercial default or the new legal regime for crowdfunding platforms, we are going to deal with the modifications that this law has introduced in the regime of limited liability companies.
Chapter II, “Measures to speed up the creation of companies”, introduces reforms with regard to limited liability companies, which are intended to facilitate and encourage the creation of this type of company by enabling them to be set up much more quickly and easily.
To this end, this law has reformed the minimum share capital required to set up this type of company from 3,000 euros to the symbolic amount of 1 euro.
This reduces the costs of setting up the company, allows the founding partners to establish the company structure as they wish, and brings our system into line with that of many other European countries – which do not require a minimum share capital to set up limited liability companies – which will be a great incentive for the creation of new companies in our country, thus avoiding the possible incentives to set up companies in other countries with fewer requirements for incorporation.
Although Law 18/2022 has de facto abolished the requirement to have a minimum share capital, it has provided for a security regime for corporate creditors in the event that they incorporate the company with an amount of less than 3,000 euros.
Thus, a figure at least equal to 20% of the profit must be allocated to the legal reserve until the reserve, together with the share capital, reaches the amount of 3,000 euros. It also provides that, in the event of liquidation – 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.
Another of the key points that this law has introduced with respect to limited liability companies is the streamlining of their incorporation. Taking advantage of the digitalisation phenomenon that is taking place in the economic sphere, and without prejudice to the possibility of continuing to be able to incorporate companies by means of a public deed executed before a notary, this law has introduced the possibility of incorporating the company telematically through the Information Centre and Business Creation Network (CIRCE) and the Single Electronic Document (DUE).
To encourage this telematic incorporation, an obligation has been established – yet to be developed by regulation – both for notaries and for intermediaries who advise and participate in the creation of these companies, to inform the founders of the advantages of using the Entrepreneur Service Points (PAE) and the Information Centre and Business Creation Network (CIRCE) for the incorporation and start-up of the activity.
However, focusing on the regime for the telematic incorporation process, notaries are obliged to be available in the Electronic Notarial Agenda and to be able to carry out the incorporation of companies through CIRCE, without being able to reject any incorporation of these companies that have been processed by telematic means, which could lead to a serious infringement.
As for the telematic incorporation procedure, it can be carried out using a public deed in standardised format, simplified models of powers of attorney in standardised format and standard articles of association, the content of which will be developed by regulation, the use of the Single Electronic Document (DUE) and the telematic processing system of the Information Centre and Company Creation Network (CIRCE).
We cannot deny the great incentive that all these measures introduced by the “create and grow law” provide for the creation of new commercial companies in the Spanish economy.