We analyze the measures introduced by Royal Decree-Law 11/2020, from every angle of business law: corporate/commercial contracts, tax, labor and employment, restructuring and insolvency, procedures and administrative law.
Over the past weeks, Spanish companies and credit applicants from all industries, both essential and non-essential, have been implementing strategies in order to try, as far as they can in the circumstances, to ensure liquidity and minimize the impact of COVID-19 on their activity. This includes a number of measures in all areas of the business, which are in turn conditioned by the measures implemented by the Spanish government and other supra-national, national, autonomous community and local authorities. All these measures and every new piece of legislation can be tracked in our special 'Companies facing the coronavirus COVID-19'.
The toughening of lockdown measures in Spain and resulting closure of all business activities not classed as essential makes it absolutely necessary to keep very much in sight this week the measures approved in the labor and employment field. In the domain of corporate law and commercial contracts, the decision governing the first tranche of guarantees to soften the economic effects of the crisis has already been published in the Spanish Official State Gazette (BOE). As for tax matters, the personal income tax and wealth tax season is about to start. In the litigation arena, the general statute of limitations for personal action has been extended. And there are also important mobility and transport, and restructuring and insolvency issues and matters related to administrative law.
This measure will not apply to the activities and cases listed in the annex to the royal decree-law, or to employees who are already working remotely or employees of any companies that have already applied for or are implementing a temporary layoff with suspension of contracts or are authorized to carry out a temporary layoff with suspension of contracts while the leave set out in this royal decree-law is in place.
Royal Decree-Law 9/2020, including a number of additional measures to Royal Decree-Law 8/2020, has been published and contains provisions on the application process for unemployment benefit, the monitoring of temporary layoffs (ERTEs) or the tolling of terms of temporary contracts.
In this article we offer a few recommendations to assist the self-employed and companies with fulfilling the general requirements laid down by the decision for accessing this new financing, and so speed up application procedures at financial institutions.
The new provisions in Royal Decree 309/2020 deal with the authorization regime, cross-border activity, corporate governance principles and compensation policy and the obligations relating to solvency for specialized credit institutions.
In view of the cash pressures that the current state of emergency may create, it is advisable to bring forward analysis of returns to file them as soon as possible (if a refund of tax is due) and evaluate, in any case all potential tax benefits to be applied.
In the context of the extraordinary situation stemming from the COVID-19 health crisis, the Spanish Registrars’ Association and the Spanish National Securities Market Commission (CNMV) issued a joint statement on March 26, 2020, in which they consider that, as regards financial statements and the proposed allocation of profit/loss, companies may, among other alternatives, choose to proceed as follows:
This guarantee facility is to be managed by ICO and will cover new loans and other types of financing provided by financial institutions to companies and the self-employed to soften the economic effects of COVID-19.