[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN SPAIN] 93
Having said the above, the defining parameters of a micro-companies are to have less than 10 employees and a turnover of less than Eur. 700,000 euros or liabilities of less than Eur. 350,000, all according to the annual accounts corresponding to the last fiscal year. Entering the procedure, any company or individual that meets the parameters indicated in the previous paragraph and is in current, imminent (three months) or probable insolvency (forecast of up to two years) may request the insolvency proceeding, which will be processed through this special procedure. As mentioned above, this procedure is characterized by the streamlining of procedures by providing for appearances to be made by telematic presence (hearings, appearances, declarations) and acts of communication by electronic means and using forms. However, as a counterbalance to this streamlining of formalities, the submission of seriously inaccurate information or documentation is considered as a cause of guilty insolvency. As with the general procedure, the Micro- company procedure may or may not be preceded by a negotiation period to try to reach an agreement with your creditors. This period will have a maximum and non- extendable duration of three months after which, without having reached an agreement, the insolvency proceeding must be filed provided that you are in actual insolvency (not if it is imminent or probable). The main effects of the negotiation period are the suspension of judicial or extrajudicial executions of the assets and rights necessary to continue the activity, except with respect to public creditors, and the impossibility for creditors to file for insolvency proceeding. The special procedure for microenterprises can be processed in two ways:
a) As a continuation procedure, for which it will be necessary to approve a Continuation Plan that must be approved by the creditors, which must be homologated in order to affect public law claims, with certain exceptions. In addition, with the application for the Continuation Plan, it is possible to request, among other measures, the suspension of the foreclosure of credits with real or public guarantee on the assets or rights necessary to continue the activity for a maximum period of three months. b) As a liquidation proceeding, which will be opened at the request of the debtor, when the continuation plan is not approved, homologated, or not complied with and, very importantly, if the debtor is not up to date with its tax or Social Security obligations accrued after the opening of the insolvency proceeding. Also in the liquidation proceedings, certain measures may be requested, the most important of which is the suspension of the execution of secured claims on the assets or rights necessary to continue the activity for a maximum period of three months. The liquidation will be carried out through the electronic platform system and cannot last more than three months, extendable for an additional month.
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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