The special procedure for micro-enterprises was one of the main novelties of Law 16/2022, of September 5, reforming the consolidated text of the Bankruptcy Law, with the aim of seeking maximum procedural simplification and cost reduction in the processing of a bankruptcy procedure.

This is the mechanism applicable in situations of insolvency of natural or legal persons who carry out a business or professional activity with a small size (less than ten employees and an annual turnover of less than 700,000 euros or liabilities of less than 350,000 euros), distinguishing two possibilities:

1. Continuation procedure.

2. Liquidation procedure with or without transfer of the company in operation. If at least 85% of the credits correspond to public creditors, the special procedure may only be processed as a liquidation procedure.

Without prejudice to the fact that the insolvency situation may be caused by other causes, once three months have elapsed of non-payment of tax, Social Security or labour obligations, the debtor must request the opening of this special procedure within a period of one month. If the procedure is not requested within this period, the reductions and delays resulting from the approval of the continuation plan will not affect tax and social security credits.

The request to open the special continuation procedure will be made using the corresponding standardized form at the electronic court headquarters or at the notary's offices or offices of the commercial registry or chambers of commerce and must be communicated by the debtor to the Tax Agency and the General Treasury of Social Security within 72 hours. If you fail to comply with this communication obligation, the credits of the Tax Agency and Social Security will be excluded from the reductions and delays resulting from the approval of the continuation plan.

In the case of public credits, the opening of the special procedure will not suspend the execution of credits that are classified as privileged, unless the debtor requests it with respect to assets and rights necessary for the continuity of the business or professional activity and it is so agreed by the judge. If it is agreed, the suspension will be maintained until it is verified that a continuation plan will not be approved, and, in any case, for a maximum of 3 months from the decree in which the request is deemed to have been made.

1. Within the scope of the continuation procedure , a continuation plan must be drawn up, which will be communicated electronically to the creditors, who will vote on the approval of the plan using the standard form. The plan will be considered approved when all classes of credits vote in that direction, or when it has been approved by some class, provided that in the latter case compliance with certain additional requirements is proven. In order for a class of affected credits to be understood as voting in favour of approving the plan, it is necessary that the majority of the liabilities corresponding to that class (two thirds in the class of credits with real guarantee) had voted in favour. The Tax Agency will be deemed to have voted in favour of the continuation plan if it contains a reduction of up to 15% of the amount of ordinary credits, unless a vote is cast against it.

   There are certain credits that cannot be affected by the plan, such as credits for food, for non-contractual civil liability, labor credits other than for senior management personnel, and privileged public credit.

   For public law credits, the plan may not entail a change in the applicable law, a change in the debtor, the modification or extinction of guarantees or the conversion of the credit into shares or corporate interests, into a participating credit or loan or into an instrument with characteristics or rank different from those of the original, but it may contemplate reductions in ordinary and subordinated credits.

   Once the plan has been approved, the debtor or creditors holding the affected credits may request judicial approval of the plan. The judge will approve the plan if it ensures the viability of the company, the insolvency and procedural requirements are met, the required majorities are present, equal treatment is given to credits of the same class, the best interests of the creditors are proven (compared to a hypothetical liquidation of the micro-enterprise), and the debtor is up to date with the payment of tax debts and Social Security debts accrued after the request to open the special continuation procedure.

2. If the plan is not approved, its approval is rejected by the judge, its challenge is upheld or it is not complied with, the special liquidation procedure is opened. The opening of the special liquidation procedure will also be determined in any case, if the debtor is not up to date with the fulfillment of tax obligations or with Social Security, provided that their accrual is subsequent to the order opening the special procedure.

   In the special liquidation procedure, the debtor must indicate its willingness to liquidate the assets or, on the contrary, request the appointment of a bankruptcy administrator, presenting the corresponding liquidation plan.

   The liquidation of individual assets or generic categories of assets will take place through an electronic platform system, and additionally through a specialized entity, unless it is duly justified according to objective criteria.

   The execution of liquidation operations may not last more than three months, extendable for one additional month, with monthly liquidation reports being produced.