Through this article, our ambition is to briefly describe the process of the dissolution and winding-up described in the Spanish Companies Act as a mechanism to put an end to the activity of a company in Spain, but also to clarify the main difference with the process of winding-up in the case of bankruptcy.
The economic crisis led to the cessation of activity of many companies. Those that had only one client have been obligated to terminate the labour contracts with its workers.
Of the various probable instances for the dissolution of an L.L.C. in Spain, some are based on economic reasons (accumulation of losses, capital reduction below a legal threshold, etc.) and others may be due to the behaviour of its partners (paralysis of the company, agreement on the dissolution, etc.).
With the reform of the Spanish Penal Code and the debut of criminal liability for legal entities, the supervision and compliance management allocated to a compliance officer has a significant importance for companies.
Before creating your own limited liability company in Spain (L.L.C.), you must be careful when it comes to rules of incorporation, drafting the articles of incorporation, and administrative procedures; those performed before a notary, as well as tax-related obligations.
Distance selling has increased significantly in recent years, thus requiring knowledge of the registration requirements for distance companies in the Distance Selling Companies Registry.
The counting of paid leave days is not always clear, as demonstrated by the recent decision of the Court of Appeals regarding a dispute between Air France and one of its part-time employees. It is therefore important for employers to remain aware of the regulations on paid leave at all times.
The L.L.C. is a very common type of company in Spain, it is important to be aware of the rules governing the formation, operation, and dissolution of an L.L.C before establishing one’s own company.
The reform of the Spanish Penal Code has accentuated the importance of compliance. It is clearly stated in Article 31(a) of the Penal Code that all companies are required to establish or strengthen programs that focus on compliance to criminal rules, emphasizing the criminal liability consequences that breaking these rules entail.
By acquiring a shelf company, a company’s start-up period can be circumvented, saving considerable time. This is a major benefit as it takes several months to establish a new company in Spain. Additionally, since shareholders bear unlimited liability with their business and personal assets during the time until the company’s entry into the Commercial Register is made, risks are reduced when the start-up period is reduced.
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