On the 19th of September, the Spanish Congress of Deputies approved a new Law for creating and expanding companies, better known as the Crea y Crece (Create and Grow) Law. This Law is among the core reforms of the Recovery Plan to facilitate the creation of companies to combat commercial delinquency and promote business growth. Regarding the entrepreneurial framework, how would this Law affect you if you started a business or are considering it?
Creation
Regarding creation, this Law introduces several modifications. We must highlight two of them for their relevance, given that they will help many entrepreneurs access the entrepreneurial ecosystem:
- First, the most striking. Now, a company can be created with an initial contribution of only one euro! You read well, one euro, as opposed to the €3,000 that was required up to now.
- Second, the simplification of the creation process, thanks to the incorporation of technology, allows founders to benefit from the new technology. The incorporation of limited companies can be carried out through the telematic processing CIRCE (Centro de Información y Red de Creación de Empresas) and the Documento Único Electrónico (Single Electronic Document).
Growth
Once companies have entered the growth phase and require financing for their development, the Crea y Crece Law introduces additional changes to favor their evolution:
- The new regulations broaden the range of companies that can be invested in by venture capital entities. It includes, for example, financial companies with a high technological component (fintech).
- This Law includes an adaptation to the European regulation 2020/1503, regulating participatory financing platforms. Thanks to this regulation, equity crowdfunding rounds of up to €5,000,000 can be conducted, regardless of the type of investors. The potential growth of the companies of these rounds will be considerably increased.
- In addition, the Crea y Crece Law includes the possibility for investors to create vehicles in which to group together.
An advantageous Law
Incorporation of companies with only one euro, rounds of up to 5,000,000 €, vehicles for crowdfunding investments, a range of potential recipients of venture capital, and the possibility of carrying out the incorporation of telematic procedures. These are the main changes that this Law has approved, thanks to a broad consensus in Congress. It is considered very positive for all actors in the ecosystem, both entrepreneurial and investor.
At Fellow Funders, we are on our way to becoming the first multi-sector equity crowdfunding platform in Spain accredited to operate within the framework of European Law. We are currently processing all the necessary documentation to officially announce it, which will allow us to accelerate the growth process we have experienced in the last five years. We will do this, as always, by helping entrepreneurs and startups to grow. We believe that this is the ideal time to start a new project. Never before have there been fewer barriers and more possibilities for alternative financing. Entrepreneurship has never been so easy.
