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The new law regarding entrepreneurs, which is being considered by the government, is taking form and shall provide protection and facilities, which the government intends to grant to those entrepreneurs who wish to launch their own business. The basis of this law consists of adapting corporate and fiscal laws to the reality and the current needs of entrepreneurs.
PRINCIPAL MEASURES TO BE TAKEN
a) Incorporation of companies with capital of 1 Euro.
The draft of the new law studies the possibility of incorporating companies with a share capital of 1 Euro, instead of a minimum share capital of 3.000.- Euro for a limited liability company, in order to allow the start up of projects for persons with limited initial resources. Nevertheless, within the term of 6 months to one year, the company should meet the minimum share capital amount currently required. The main idea is to facilitate the incorporation of companies as much as possible.
This formula has already been passed in other countries, for example in Germany with the passing in 2008 of the UG (Entrepreneurial company), where the number of incorporations surpassed the most optimistic forecasts of the lawmakers. However, it must also be born in mind that this type of company has also suffered a number of problems, which we should learn from in Spain, namely:
Bank financing problems: given the symbolic amount of share capital, many entrepreneurs encountered great difficulty in obtaining bank finance for their business projects.
Problems with suppliers: as with the banks, many suppliers object to working with companies of this type because of the lack of confidence in said share capital.
b) Non-seizable nature of the dwelling and other measures for limiting the liability of the self-employed.
The new law regarding entrepreneurs considers the new figure of the self-employed person to have limited liability and be given effective protection, and shall thus impede the seizure of main dwellings or the materials necessary for carrying out business activity in the case of being in debt. This measure intends to limit in an effective way the liabilities contracted by the self-employed collective, in this way favouring the initiative of the entrepreneur. On its part, the self-employed collective has asked the government that the new law considers the possibility of fixing a minimum non-seizable amount and assistance for those self-employed persons who, for various reasons, were not successful in their first entrepreneurial project, but wish to try again.
c) New collection system for Value Added Tax (VAT)
Probably one of the most requested measures for some time by the business community, which may finally see the light in this law and which consists of small and medium-size businesses and self-employed persons who invoice less than two million Euro annually being able to opt for cash VAT, which means that this tax does not have to paid until payment of the invoice has been collected. The intention is to do away with the obviously unfair system, which penalised small and medium-sized businesses, obliging them to advance payments to the treasury for an invoice that had not yet been paid, thus giving rise to, in such times as the present, cash flow problems.
The measures considered in the draft of the new law regarding entrepreneurs is expected to clearly motivate the start-up of new entrepreneurial projects, which help to invigorate the economy, and which shall adapt to the needs of the real economy and grant a series of guarantees to the self-employed and small and medium-sized businesses, which make up 96% of the entrepreneurial fabric of the country. It is hoped that with these measures, business undertakings shall be bolstered to a great extent helping as much as possible with general economic recovery.
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