What’s new in the Crea y Crece Law to avoid late payments?
The new Crea y Crece Law is about to be published in the BOE. It is part of the Recovery, Transformation and Resilience Plan that the government submitted to Brussels with the aim of accessing European Next Generation EU funds. Specifically, the regulation appears in Component 13, “Boosting SMEs”.
In Spain, SMEs account for 99.8% of the total business sector, representing 62% of Gross Value Added (GVA) and 64.2% of total employment. It is essential for our economy and improving competitiveness to give priority attention to SMEs.
This is the purpose of the Business Creation and Growth Act.
The new Law on Business Creation and Growth will simplify the procedures for setting up a company by digitising the whole process, as also required by the Directive (2019/1151), which it promotes:
- Innovation in both the administration and the business environment.
- It will reduce the minimum capital requirement to €1 (currently €3,000) for the creation of a limited liability company.
It will entirely entail lower incorporation costs, thereby removing a barrier to market entry, widening the entrepreneur’s choice and improving the business climate.
Fighting late payments
One of the most relevant new developments is the incorporation of tools to improve the effectiveness of the application of Directive 2011/7/EU on combating late payment in commercial transactions.
Late payment and the lengthening of average payment periods lead to liquidity problems for companies, as well as other management problems that can end up limiting their activity and growth, especially in the case of SMEs.
This shift is towards a “late payment culture”. It will be based on guidelines on publicity and transparency of payment terms, best business practices and compliance mechanisms such as an out-of-court dispute resolution system.
Companies wishing to receive aid of more than 30.000 € may not have any invoices outstanding for more than two months.
The article in question will distinguish between two types of beneficiaries:
- Those who can submit abridged profit and loss account.
- Those who cannot submit an abridged profit and loss account.
Small and medium-sized enterprises
They may submit abridged profit and loss accounts if they meet the following conditions:
- that the total asset items do not exceed 11,400,000 thousand euros.
- That the net amount of their annual turnover does not exceed 22,850,000 euros.
- That the average number of workers employed during the financial year does not exceed 250.
They will be obliged to submit a declaration that they have no payments pending that exceed the period established by contract or the maximum period of 60 days imposed by the regulations in force.
If, after subsequent verification of the data, it is found that they have been untruthful, they will have to return the aid.
Large companies
It will be the auditor who will certify this circumstance independently of any financing for early payment from the supplier company
In addition, and finally, please note that in specific sectors some incentives have been incorporated, such as:
- The requirement of a certificate of payments to contractors by the successful tenderer.
- The withholding of guarantees once legal action is initiated against a contractor for non-compliance with payment deadlines or the prohibition of access to public procurement.
They will be obliged to submit a declaration that they have no payments pending that exceed the period established by contract or the maximum period of 60 days imposed by the regulations in force. If, after subsequent verification of the data, it is found that they have been untruthful, they will have to return the aid.
Similarly, regardless of whether they are included in the specifications or not, penalties of up to 50% of the amount of the contract will be applied when there is a firm resolution.
If you have any doubts about this subject, please do not hesitate to contact us, by telephone to Carles Monfort Codina or by e-mail to cmc@btsasociados.com, we will be delighted to help you.