The liquidation of companies in Spain
The liquidation of a company in Spain is a legal option chosen in a shareholder’s meeting. It leads to the splitting of the company’s assets after complying with its obligation of payment to creditors.
Seizure of a main residence in Spain due to debts to Social Security
The Entrepeneurs Act aims to find a different solution for debt collection procedures by facilitating a second opportunity to self-employed workers affected by the debt collection procedure.
Changes in the Bankruptcy Law in Spain
The Royal Decree-Act 4/2014 is focusing on the refinancing agreements which may include waivers and capitalisation of debt and deferral payments. These agreements will essentially make the heavy burden of debt much more manageable for businesses.
Merry-Go-Round of Amendments to the Spanish Insolvency Law
Three partial reforms of the Spanish Insolvency Law have already been approved by means of Royal Decree-Laws dated on March 2014, September 2014 and February 2015. The three main purposes sought are: enhancement of prepetition restructuring deals; extension of pre-insolvency refinancing agreements to composition agreements and offer a second chance for individual creditors.
Unapproved Refinancing Agreements in Spain
A new regime is being introduced in order to give some unapproved refinancing agreements judicial validity. The new regime will enter into force before the effective date of the Real Decree Law; however, the previous regime will still apply unless the parties choose otherwise.
The Dissolution of a Company in Spain due to Losses
The dissolution of a company in Spain as a result of losses, in particular in times of an economic crisis, requires certain procedures to be followed. The Corporate Enterprises Act (LSC) highlights different methods of dissolving a company depending on what type of company it is.
Validated Refinancing Agreements in Spain
The mechanism for legal ratifcation of the refinancing agreement was reviewed under the Real Decree-Law. One of its amendments included extending the effects to non-participating creditors (without collateral) and clarifying its scope via vis-Ã -vis creditors (with collateral). This mechanism is making the conversion of credits into equity loans much more efficient in Spain.
Responsibility of Administrators in the Dissolution of Companies for Losses in Spain
The dissolution of any capital-based company in Spain which incur into losses has reduced the equity amount significantly. It would be beneficial for partners of the companies to either contribute to offset losses or to increase the capital of the company by contributing and receiving shares in the company. However, this implementation can face some challenges due to the varied type of losses.
Taxation Aspects of the Insolvency Law in Spain
The Royal Decree-Law incorporates tax measures designed to enhance the legal pre-bankruptcy framework for refinancing agreements. These measures seek to facilitate consensus between debtors and creditors, maximizing asset value and minimizing or deferring liabilities to prevent insolvency.
New Effects of Filing for Pre-Insolvency in Spain: 5 Bis Communication
On March 8, 2014, Spain introduced Royal Decree-law 4/2014, known as the New Reform, to enhance the Spanish Insolvency Law. Acknowledging the inflexibility in pre-insolvency and insolvency systems, the reform aims to boost refinancing discussions. It achieves this by establishing a more secure pre-insolvency environment, safeguarding the debtor’s key assets against enforcement by unsecured creditors.
