The 'Create and Grow' Law will enter into force twenty days after its publication in the BOE

MADRID, 29 Sep. (EUROPA PRESS) -

The new Law for the creation and growth of companies, known as the 'Law creates and grows', with measures to fight against business late payment, promoted by the Government and validated in the General Courts, will enter into force in twenty days --except some exceptions-- after its publication this Thursday in the Official State Gazette (BOE).

In accordance with the provisions of the BOE, chapter V of the law will come into force as of November 10, 2022. This section introduces a new legal regime for participatory financing platforms. These platforms --also known as 'crowdfunding platforms'-- are companies whose activity consists of putting in contact, in a professional manner and through web pages or other electronic means, a plurality of natural or legal persons who offer financing with other natural or legal persons who request it on their own behalf to allocate it to a specific project.

On its side, the entry into force of article 12, regarding electronic invoicing between businessmen and professionals, is subject to obtaining the community exception to articles 218 and 232 of Directive 2006/112/CE of the Council, of 28 of November 2006, relating to the common system of value added tax.

The new law contemplates different reforms aimed at facilitating the creation of companies, their growth and expansion, streamlining procedures and also measures to combat delinquency. Specifically, the cost of setting up a limited liability company is reduced to a share capital of one euro, compared to the legal minimum of 3,000 euros established up to now.

The telematic establishment of companies is also facilitated through the single window of the Information Center and business creation network (Circe), simplifies procedures, expands the catalog of license-exempt activities and modifies several aspects of the Law of Guarantee of Market Unit.

Regarding delinquency, the rule does not contemplate a sanctioning regime such as the one demanded by a good part of the Chamber, but up to five regulations are modified to combat it, typifying it as an illegal competition practice in the Unfair Competition Law, and promoting coercive measures from the General Subsidies Law, the Public Sector Contracts Law or electronic invoicing.

Thus, incentives are contemplated such as the requirement of a certificate of payments to subcontractors by a successful bidder, the retention of guarantees once legal proceedings are initiated against a contractor for failing to meet deadlines or the prohibition of access to public procurement.

Also, regardless of whether they are included in the specifications or not, sanctions of up to 50% of the amount of the contract will be applied when there is a firm resolution and, when requesting a subsidy, it will be required to prove that all eligible expenses are paid in term.

Other incentives go through a blacklist of delinquencies -companies will enter with 600,000 euros and 10% of their invoices after the deadline-, the obligation to disclose on its website and annual accounts report the total and relative volume of invoices paid after the deadline and the prohibition of forcing a company to use a specific electronic invoicing platform.

On the other hand, improvements are incorporated in the financing instruments for companies that are alternatives to bank financing, such as crowdfunding or participatory financing, collective investment and venture capital.

In the field of 'crowdfunding', it relaxes the rules for platforms to provide their services in Europe, allows the creation of vehicles to group investors and reduce management costs, raises the investment thresholds per project (from two to five million euros) and the investment limits per project for retailers are modified, which become the highest between 1,000 euros or 5% of wealth.

Likewise, the type of companies for the investment of risk capital is expanded, including financial companies with a high technological component, the recognition of closed funds is expanded -debt funds that can invest in loans, invoices or commercial paper- and it is eliminated the Sicav the requirement of the quarterly report, making the investment diversification requirements more flexible.