Law 3/2020, subsequently modified by Law 5/2020, established the general suspension of procedural deadlines and for the processing of all kinds of administrative procedures and files.

Law 7/2020 introduces the rules applicable to the calculation of the periods that were declared suspended, adopts new measures in insolvency and commercial company matters and specifies the drafting of certain provisions contained in Law 5/2020 in order to avoid doubts about interpretation.

Above we announce the most relevant points of Law 7/2020.

1- Applicable rules to the calculation of the procedural deadlines that were declared suspended

As a general rule, it is expected that the computation of the procedural deadlines will begin from the day following the government declares, by decree, the end of the health emergency situation caused by the SARS-CoV-2 pandemic.

Certain specific rules are foreseen in relation to the computation, establishing differences depending on whether the period in question is established in days, natural or working days, from date to date, by months or years.

2- Measures in bankruptcy and corporate law

New measures are established in the bankruptcy and corporate sphere in order to temporarily and exceptionally mitigate the consequences of the application of the general rules regarding the cessation of payments and the dissolution of commercial companies.

Until December 31, 2020, those merchants who cease payments do not have the obligation to request the judicial body its declaration, without any type of responsibility for not having requested it.

Likewise, in order to avoid a situation in which a mercantile company should dissolve due to losses suffered during the health crisis, it is exceptionally foreseen that public limited companies and limited liability companies should not take into account the losses for the year 2020.

It must be borne in mind that the suspension of the aforementioned dissolution cause does not operate due to the results of the 2021 financial year and subsequent years, in which the administrators will be required to convene an extraordinary shareholders meeting in order to adopt the declaration of dissolution of the company in the event that losses are evidenced that will reduce the net worth less than half the share capital, or to adopt the appropriate measures to avoid dissolution.

Another relevant measure is that until December 31, 2020, the general meetings of partners and the boards of directors of the companies, may adopt agreements in writing and without a session, although it is not foreseen in their articles of association, being able to cast the votes for ordinary mail or by any means of electronic telecommunication that guarantees the identity of the partner or director as well as the integrity of the meaning of their vote.

3- Modification of Law 5/2020, of April 18, on new exceptional and urgent measures due to the health emergency situation caused by the SARS-CoV-2 pandemic

Through Law 7/2020, the wording of certain provisions of Law 5/2020 has been specified, to avoid interpretative doubts, and to expand some of the measures that were foreseen.

It is necessary to highlight:

  • The recipients of the leave paid for absence from work to take care of the children are expanded, extending it to people who do self-employment and who benefit from the 125% and 137.6% contribution bases, as well as for people who have started an activity on their own between March 1 and 13, 2020, and also for people under 35 who meet certain requirements established by regulation.

  • The retroactivity of the perception of the aforementioned benefit and the reduction or temporary suspension of the contribution until April 2020 are contemplated.

  • Law 7/2020 modifies the provision of Law 5/2020, relative to the reduction of the rent of the premises for business and the reduction of the notice period and of the compensation for renouncing the contract of lease of premises for business.

Thus, it is clarified that the tenants of business premises in which their activity has been voluntarily suspended, may request the reduction of the rent of the premises, in the percentages that the Law establishes.

Likewise, during the period between March 14, 2020 and December 31, 2020, the lessee may unilaterally renounce the lease of a business premises before the term agreed upon expires with a notice of one month as minimum and without having to satisfy the compensation provided for in the Law of urban farm leases.

4- Ratification of the measures adopted by the Government

The ratification of all the exceptional measures adopted by the Government is established through the decrees approved as of April 30, 2020, with reserve to the modifications provided for in Law 7/2020.

Law 7/2020 entered into force on June 5, 2020.

The content of this document has been drafted taking into account strictly the regulations in force on the day of issue. Any regulatory novelty that is published in the BOPA, that modifies or expands its content, will entail the publication of a new news item that incorporates said novelties.

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Cordially.