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Business owner, you are not alone

| COVID-19 / News

The Government has passed a series of decrees containing numerous measures, but what about small and/or medium-sized businesses?

On 26th February the first case of COVID-19 was detected on the peninsula. From that date all the events, economic, legislative and health begin to happen at an incessant speed.

On 10 March the Council of Ministers approved Royal Decree Law 6/2020 adopting certain urgent measures in the economic field and for the protection of public health, measures aimed at preventing the spread of the disease, maintaining the social protection of workers and self-employed workers and guaranteeing the supply and best distribution of medicines and health products.

On 12 March, Royal Decree Law 7/2020 was approved, adopting new urgent measures to respond to the economic impact of COVID-19, including measures to provide liquidity and reduce costs for companies, especially SMEs, the self-employed and the tourism sector.

On the 14th through the Royal Decree 463/2020 the state of alert was declared, limiting the freedom of movement and measures of containment that compromise the maintenance of the productive network.

On the 17th, Royal Decree Law 8/2020 was approved, on urgent extraordinary measures to face the economic and social impact of the COVID-19, in which many other measures were taken, making access to the benefit for cessation of activity of the self-employed more flexible, but not suspending social contributions to those affected by the COVID-19. It was also agreed to exempt companies from paying social security contributions if they take advantage of a Temporary Employment Regulation Scheme, and a moratorium on mortgage payments was approved for the most vulnerable.

On the 25th, the Resolution of the Congress of Deputies is issued, ordering the publication of the Agreement authorising the extension of the state of alarm declared by Royal Decree 463/2020 of 14 March, extending it until 00:00 hours on 12 April 2020.

And, on Sunday 29 March, Royal Decree-Law 10/2020 was published, regulating recoverable paid leave, which is obligatory for all those workers who provide services in those sectors considered to be non-essential.

I'm sure you are happy with all the measures that are being agreed but, in the meantime, what about your small and/or medium business? Surely and in the best of cases you have had to ask your employees to telework -after investing in telematic media- or perhaps you have had to carry out a Temporary Employment Regulation File or, possibly you do not know what to do but what is almost certain is that this 2020 will not close with the budget you had planned.

At this point you have to know that the current economic situation will not end with the state of alarm or the end of the pandemic. Inevitably after the tsunami comes the hangover, that is, the recession.

This time of standstill must be used to take advantage of it to redesign your business, to restructure it, to assess whether all commercial areas were working and whether it is still profitable that idea that once was, or simply to assess whether it is really worth continuing to fight for a business model that no longer has a place in our current society.

Thus, you should take advantage of this time and, above all, you should take advice to find a solution to your current situation and plan your future situation. It is time to look for that opportunity.

You should know that, as far as business restructuring is concerned, Royal Decree Law 8/2020 has established a series of measures that will allow you to take advantage of this opportunity.

  • Consolidation of accounts. The account formulation period is suspended until the end of the alert state.
  • Mandatory audit. If you had formulated accounts for the previous year after the declaration of the alarm state, if the audit is compulsory, it will be understood as extended by two months from the end of the alarm state.
  • Year-end meeting. The ordinary general meeting to approve the accounts of the previous financial year must be held within three months of the end of the period for drawing up the annual accounts.
  • Right of separation. Members may not exercise their right of withdrawal until the end of the state of alert, even if there is a legal or statutory cause.
  • Calling a meeting. If, before the end of the state of alert or during the duration of the state of alert, there is a legal or statutory cause for the dissolution of the company, the legal period for calling the general meeting of shareholders to adopt the resolution of dissolution or the resolutions that remove this situation, will be suspended until the end of the state of alert.
  • Joint and several liability for debts. If during the state of alarm there is a legal or statutory cause for dissolution, the administrative body will not be liable for the company's debts incurred during that period.
  • Duty to apply for bankruptcy. The debtor who is in a situation of insolvency during the time that the state of alert lasts will not have the duty to apply for a declaration of voluntary insolvency until two months have passed since the end of the state of alert. If a creditor files for bankruptcy proceedings against the debtor, his application will not be accepted until the state of alert ceases or the two months indicated have elapsed.

During the state of alert, the debtor who has notified the competent court for the declaration of bankruptcy of an out-of-court settlement agreement, or the initiation of negotiations with the creditors to reach a refinancing agreement, or has made a communication informing of the beginning of the negotiations to obtain adhesion to an anticipated proposal of agreement, even if the period referred to in the fifth paragraph of Article 5 bis of Law 22/2003, of 9 July, on Bankruptcy, has expired, will not have the duty to request the declaration of bankruptcy, while the state of alert is in force.

So, in part, it also depends on you how you want your business situation to be once this period, which we are all experiencing and to which we are all exposed, comes to an end.


For further information, please contact:

Claudio Aguiló


Read the article in Expansión

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