Bankruptcy law: Creditors feel vulnerable to regulatory reform

the coming weeks. The new regulation is intended to replace the Entrepreneurs Act of 2013, which already contained the limitation of the financial liability of entrepreneurs and freelancers in the event of possible insolvency.

In this case, the draft would continue to protect the private assets of entrepreneurs, so far advanced The Country Newspaper. The ministries of economy and justice have agreed on this Cancel debt without having to liquidate private assets. Under the new regulation, entrepreneurs could keep their home, vehicle or work equipment while benefiting from percentage debt relief.

However, this relief is of course not unconditional. Entrepreneurs who use the bankruptcy procedure and benefit from the new measures must a agreed payment schedule, which at least 40% of the creditors affected by the haircut must agree. Mortgages are left out of this equation and it is not yet known what will happen to public credit.

The new system proposed by the government therefore aims to end the uncertainty that arises around the family home of entrepreneurs before starting a business and encourage the creation of new business projects amid the recovery of the Spanish economy.

In addition, the draft prepared by the government would include a special section for the Micro SME. 10% of these companies are closed in the first year of their existence, so the new regulation aims to streamline the necessary procedures in liquidation by allowing the whole process to be carried out over the internet.

The controversial Startups Law, another key point in the government’s strategy for entrepreneurs

The preliminary draft bankruptcy law is another change the government is seeking Pedro Sanchez proposes to encourage the creation of entrepreneurial projects in the midst of the recovery phase of the Spanish economy after the pandemic. Another central axis of this strategy is the founding law, the draft of which was passed a few weeks ago.

The central points of the regulation are the Corporate tax reduction in the first years of activity from 25% to 15%; changes in the maximum investment deduction basis; debt deferrals; an increase in exemption from stock options; or the creation of a new teleworker visa designed to attract foreign talent to Spain.

However, these measures are considered insufficient by many entrepreneurs, who consider the text “unrealistic”. For them, the Startup Law eliminates the benefits for entrepreneurs who have previously failed with a company, which is incomprehensible considering that 80% of companies created in Spain close in the first three years of activity.

In addition to the preliminary draft law on startups, the government presented the strategy of the Spanish entrepreneurial nation, which includes 50 measures to promote entrepreneurial projects in the country.

Among these, his program for attracting female talent, or the creation of a network of centers for entrepreneurship, stands out, which “consists of promoting a network of incubators and accelerators, which can be public, private or mixed, and by strengthening networks throughout national geography in order to manage territorial cohesion and multiply the country’s productive capacity,” said Prime Minister Pedro Sánchez at the presentation of the strategy.

Bankruptcy, Debt, Administration, Bankruptcy Law, Incorporation Law, Laws