The Council of Ministers has approved the draft Law “Create and Grow”, for business creation and growth, which will allow the formation of a society with one euro and quickly and electronically.
In fact, Nadia Calviño, Minister of Economic Affairs and Digital Transformation, explained in the press conference after the Council of Ministers that this Law arises to promote the creation of companies and their growth by reducing the capital necessary to register a Limited Liability Company from 3,000 euros to the testimonial euro.
On the other hand, the regulation includes certain measures for creditors and configures a more flexible regime than the current successive formation regime, which is eliminated. And, with this, the creation of companies is promoted electronically through the Information Center and Business Creation Network (CIRCE), which will reduce the time of incorporation and the registration and notarial costs.
Another of the highlights of the new law is the fight against commercial delinquencies. For this reason, the bill contemplates that companies that do not meet the payment deadlines may not be beneficiaries or collaborating entities of public subsidies, at a time marked by the arrival of European funds.
This initiative is part of Component 13 of ‘Boosting SMEs’, included in the Recovery, Transformation and Resilience Plan sent to Brussels, which aims to improve business demographics and the business climate, facilitate creation and growth of companies, promote innovative entrepreneurship and digitization, attract talent and capital and reduce incentives to create companies in other countries.
After taking the law out to public consultation last July, the Government has given the go-ahead to the project to initiate the pertinent parliamentary procedures and thus comply with the commitment acquired with Brussels.
Obligation to issue and send electronic invoice
The obligation to issue and send electronic invoices in all commercial relations between companies and freelancers is to guarantee greater traceability and control of payments.
According to the First Vice President, this measure will not only reduce transaction costs and will lead to progress in the digitization of company operations, but will also allow obtaining reliable, systematic and agile information on effective payment terms, an essential requirement to reduce the commercial delinquency.
Finally, a State Observatory of Private Delinquency will be created within six months, which will monitor and analyze data on payment terms and promote good practices.
Improving the efficiency of the regulatory framework
In addition, the draft Law improves the efficiency of the regulatory framework for economic activities by simplifying existing legislation, eliminating unnecessary regulations, and establishing more agile procedures.
The Law on trade liberalization measures is also modified, expanding the catalog of license-exempt economic activities, and activities that have been considered safe by at least one autonomous community are incorporated into the list of basic state regulations.
At the same time, the new Sectorial Conference on Regulatory Improvement and Business Climate has been enabled to draft a new standard ordinance for the exercise of retail commercial activities and the possible adoption of others in collaboration with other sectorial Conferences.
Likewise, the Market Unity Guarantee Law is modified to strengthen cooperation between the different Public Administrations and the mechanisms for the protection of companies and consumers against measures that do not respect the principles of proportionality, necessity and efficiency.
Boost to ‘crowdfunding’ and other financing instruments
The rule adds measures to improve the financing instruments for business growth alternative to bank financing, such as crowdfunding or participatory financing, collective investment and venture capital.
In this area, the new Law adapts national regulations to European regulations, introducing more flexibility for these platforms to provide their services in Europe.
In addition, investor protection is reinforced and the creation of vehicles is allowed to group investors together and thus reduce management costs.
Likewise, the venture capital industry is being promoted, expanding the type of companies in which these entities can invest, including financial companies with a high technological component. The recognized figures for closed funds are expanded, including structures with extensive experience in other neighboring countries. These are debt funds that can invest in loans, invoices or commercial papers, contributing and improving the business financing of companies that have seen their financial structure affected as a result of the pandemic.