The Administration has set a goal of ending impunity for inactive and zombie companies with social debts and, from now on, the employer must respond with his assets to social debts if there are more than three years of accounts left in the Commercial Register.

On 30 July 2021, the deadline for submitting the annual accounts of companies in the Commercial Register ends. But this year will be different, since with the entry into force of the Audit Law Regulations on 1 February 2021, a new sanctioning regime appears for non-compliance employers,which aims to end the impunity that non-compliance companies had until now.

Until last year, not depositing annual accountsin the Commercial Register did not involve legal problems for companies, which favored many entrepreneurs choosing to leave companies inactive, in order to get rid of the costs of dissolution and liquidation.

Today there are around 1.5 million inactive companies in the Commercial Register.

Taking as a reference the last few years, since the formal procedure to be carried out before a notary, as well as registration comes atan important cost, it has become customary that, even if there is a willingness to dissolve and liquidate an inactive company, many entrepreneurs choose to leave the company inactive, saving the corresponding costs.

What is an inactive company?

An inactive company is a company that does not engage in any economic activity. These types of companies have informed the Treasury of the cancellation in their activity, but while they are reactivated or definitively liquidated, they avoid the expenses involved in the dissolution and subsequent liquidation of the entity.

When a company code is inactive, it cannot issue invoices,and in addition, the input VAT on the invoices received will not be deductible, since the company is not in the usual exercise of its transactions.

In addition, corporation tax on an inactive company will have to continue to be filedby checking box 026 of “Inactive Entity”.

Penalties to companies for not filing their accounts in the Commercial Register

As we have mentioned, so far, not depositing the annual accounts in the Commercial Register, at the legal level, did not affect companies, nor their administrators or liquidators.

Until now, not submitting annual accounts in the Commercial Register was profitable for companies.

By not causing legal problems, it was not necessary to pay thecosts associated with dissolution and liquidation, which meant that it was profitable to leave a company inactive. As we have seen over the years, the Institute of Accounting and Auditing (ICAC) only sanctioned in the most serious cases.

The proof is that many companies did not present the annual accounts in the Commercial Register, but did file tax returns from inactive companies in the Treasury.

Now, once the new regulation comes into force, legal advisers play a leading and indispensable role in the dissolution and liquidation of inactive companies, as well as to regulate their registration situations and avoid possible sanctions.

New sanctioning regime for inactive companies

Since this year, companies will receive a penalty of 0.5 per thousand of the total amount of the asset items,to which 0.5 per thousand of the company’s sales that have been included in the last declaration filed in the Treasury will have to be added. It should also be noted that it will be mandatory to provide the original document when processing this procedure.

If the tax return is not provided, the penalty shall correspond to 2% of the share capital. While the tax return is provided, and the result after the application of these percentages to the sum of the items of the asset and sales is more than 2% of the share capital, the penalty will be quantified in the latter, reduced by 10%.

Commercial registrars are responsible for providing the files with the relevant breaches, while ICAC will proceed to sanction,and the Tax Agency will collect the sanctions imposed and, at the same time, withdraw the NIF from the company, which will be deleted from the Registry, as established by its Tax Control Plan.

Deadline for filing annual accounts

Annual accounts must be deposited in the Commercial Register within one month of the holding of the Board in which they are approved. This will be the regulatory deadline for submitting the accounts in accordance with Article 365.1 of the Regulations of the Commercial Register and 279 of the Royal Legislative Decree.

According to Article 6 of the Civil Code, the month of time shall be calculated on a date-by-date date. This means that if the meeting is held on June 15, the deadline for submitting the accounts will end on July 15.

Note that if the accounts are presented out of time, but within the same year, it will not entail sanction. Only the deposit of accounts for the previous three years will be required to lift the closing of the registration sheet.

On the other hand, to dissolve or liquidate an inactive undertaking, the following documents must be presented in the Commercial Register:

  • Certificate of approval of accounts.
  • memory.
  • Balance of accounts.
  • Profit and loss account.
  • Statement of identification of the actual holder.
  • Environmental report.
  • Report of own shares and/or shares.
  • General identification data sheet.
  • Presentation instance.

Also, to
dissolve or liquidate an inactive company
will also require an act of the dissolution agreement, the deed of extinction, the cancellation in the Treasury, the registration in the Commercial Register, etc.

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If you need to dissolve or liquidate an inactive company, contact AYCE Laborytax’s legal advisors and business advisors and avoid sanctions.