19 Mar Applicable measures to private legal entities adopted by the Royal Decree-law 8/2020.
The state of alarm declared last 14 March 2020 by the Spanish government generated many unknowns due to the drastic measures that included the closure of most businesses.
The Royal Decree-law 8/2020, of 17 March, includes the first urgent extraordinary measures to deal with the economic and social impact of COVID-19, including a series of measures on corporate matters affecting private legal entities.
Following our previous communications regarding the urgent extraordinary measures in tax and financing matters adopted by the Royal Decree-law 8/2020, of 17 March, in response to the COVID-19 health crisis, we would also like to inform you about the main extraordinary measures applicable to private legal entities:
(i) Meetings of the governing and managing bodies: Even if the by-laws had not foreseen it, during the alarm period, the meetings of the governing and managing bodies of associations, civil and corporate enterprises, of the governing council of the cooperative companies and of the board of trustees of the foundations may be held by videoconference. The meeting will be understood to be held at the registered office of the legal entity.
(ii) Voting in writing and without meeting: During the alarm period, and even if the by-laws had not foreseen it, the agreements of the governing and managing bodies of associations, civil and corporate enterprises, of the governing council of the cooperative companies and of the board of trustees of the foundations may be adopted by means of voting in writing and without a meeting whenever the chairman decides so or when at least two of the members of the body in questions request it. The meeting shall be deemed to have taken place at the registered office.
(iii) Annual Accounts: The period of three months from the close of the financial year for the governing or managing body to draw up the annual accounts and, if applicable, the management report, as well as other related mandatory documentation, is suspended until the end of the state of alarm, resuming again for another three months from that date.
If the annual accounts had already been drawn up, the deadline for the accounting verification of these accounts, if the audit is compulsory, shall be understood to be extended by two months from the end of the alarm state.
The ordinary General Meeting of Shareholders to approve the annual accounts will necessarily be held within three months of the end of the period for drawing up the annual accounts.
In the event that the notice of the General Meeting had been published before the declaration of the state of alarm, but the day of the meeting is later than this declaration, the management body may modify the place and time set for the meeting or revoke the notice.
(iv) Right of separation: Even if there is a legal or statutory cause, the shareholders of companies cannot exercise their right of separation until the end of the state of alarm.
(v) Dissolution and liquidation: If, before the declaration of alarm or during the validity of such state, a legal or statutory cause for the dissolution of the company concurs, the legal period for the management body’s obligation to convene a General Meeting of Shareholders to approve the decision of dissolving the company or the agreements that have purpose of preventing such cause, is suspended until the end of the state of alarm.
(vi) Liability for corporate debts: If the legal or statutory cause for dissolution has occurred during the state of alarm, the directors shall not be liable for the corporate debts incurred during that period.
(vii) Term of the duty to apply for insolvency proceedings: While the state of alarm is in force, the debtor who is in a state of insolvency shall not be obliged to apply for a declaration of insolvency. Until two months have passed since the end of the state of alarm, the judges will not admit for processing the necessary applications for insolvency that have been filed during that state of alarm or that are filed during those two months. If an application for voluntary submission to insolvency has been submitted, it will be admitted for processing with preference even if it is submitted at a later date.
(viii) Suspension of the expiry terms of entries in the register: During the period of validity of the alarm state, (i) the expiry terms of the filing entries, precautionary notes, marginal notes and any other register entries shall be suspended and (ii) the calculation of periods shall be resumed on the day following the end of the state of alarm.
If you have any doubts or queries about any of the measures adopted, you can contact us at info@matp.es
