The Law of Second Chance, an alternative for entrepreneurs and startups.

SegundaOpor

Spain is among the 30 most enterprising countries in the world. In 2015 the creation of startups in Spain grew 26%. Nine out of ten startups do not exceed the first three years. The reasons are very diverse, but the most frequent are the lack of financing, competition, imitation of business models that do not adapt to the Spanish market, etc. Entrepreneurs and startups who have to face this difficult situation must know what the Second Chance Law is. The lawyers of Welegal.es, entrepreneurial firm, explain the keys to avail themselves of this Law of Second Chance. First of all, they emphasize that this law is focused on autonomous and entrepreneurial people who fail in their business idea as long as they act in good faith. So that the entrepreneur does not have to pay the debts must demonstrate that he does not have money or assets, and he has to explain the actions that have led him to this situation to have to avail himself of this law and also must demonstrate good faith in these actions. Precisely, acting in good faith is one of the most important and controversial points of this law. To be considered an entrepreneur entrepreneur acted in good faith, must meet several requirements among others: Prior to the amparo by the Second Chance Law, the debtor must have attempted to reach an out-of-court settlement with its creditors. That the judge does not consider that the insolvency has been provoked by the own entrepreneur. In the ten years prior to the competition request, the debtor has not previously been covered by the Second Chance Law. The law establishes some conditions that are not to be overlooked; first, the debtor must compensate its creditors with the assignment of assets not necessary for the exercise of its activity or shares of its own company. In any case the value of the assets or the shares must be equal to or less than the debt. Secondly, a viability plan, a payment schedule showing how to deal with these debts should be proposed, can not exceed 10 years. The Law of the Second Chance is of great interest as it provides an alternative for entrepreneurs and startups who fail to develop a project, since it allows them to start anew and to continue betting on entrepreneurship.
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