Regarding the termination of contracts with reciprocal obligations in the context of bankruptcy declaration, the Spanish regulations distinguish between contracts pending fulfilment by one of the parties or by both parties.
The deadline for the communication of credit by the foreign creditor is one month after the publication of the declaration of bankruptcy in the Spanish Official Gazette (BOE). Although it is not mandatory, the foreign creditor should make such communication for its qualification and subsequent payment.
Declaring insolvency proceedings in Spain entails its consideration as “main bankruptcy” and implies the inclusion of the debtor’s assets, regardless of whether or not they are in Spain, and that, with certain exceptions, Spanish law applies.
Spanish bankruptcy regulations list the conducts that determine the liability of the directors in bankruptcy proceedings. The consequences of such behaviour include disqualification, loss of rights associated with the position of a creditor of a bankruptcy or a sentence to cover the insolvency deficit.
During the COVID-19 pandemic, arbitration stands out as an advantageous alternative to settle legal disputes between companies. The ordinary jurisdiction has suffered a slowdown in its processes and does not provide the fast and effective response demanded by current market operators.
The remuneration of directors of a Spanish company is deductible from the corporate income tax. However, the company’s bylaws must expressly contemplate the remunerated character of the post, and the remuneration scheme used to pay the director must be determined with certainty.
Non-refundable contributions are an effective and immediate mechanism for injecting funds into a company. Its purpose may be to solve the company’s financial imbalance, provide liquidity to the company or undertake a specific project. Unlike capital increases, non-refundable contributions do not require formalization in a public deed, nor registration with the Commercial Registry.
In the following informative note, we address the Royal Legislative Decree 1/2020, of 5 May, that approves the redrafted text of the Insolvency Law, and revises its structure and key characteristics.
The state of insolvency obliges companies to apply for the insolvency proceedings. We analyse some facts that can help to identify this status, as well as the most commonly used accounting formulas to predict it: the acid test and the Altman Z-score.
The Bankruptcy Law in Spain regulates the basic aspects and the deadlines within which companies should apply for bankruptcy when their situation does not allow them to fulfil their payment obligations on a regular basis.
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