Microenterprise (Spanish Insolvency Law)

Microenterprise in Spanish Insolvency Law

The concept of microenterprise in Spanish insolvency law was introduced by Act 16/2022, which substantially reformed the Consolidated Insolvency Act (Texto Refundido de la Ley Concursal, TRLC) to transpose EU Directive 2019/1023 on preventive restructuring frameworks.

For the purposes of the TRLC, a microenterprise is any debtor exercising business or professional activity that meets both of the following conditions at the time of filing:

1. Fewer than 10 employees.
2. Total liabilities below EUR 700,000.

This definition is specific to insolvency law. It differs from the EU’s general SME microenterprise definition (fewer than 10 employees and annual turnover or balance sheet below EUR 2 million) used in accounting, competition, and state aid rules.

The Special Microenterprise Procedure

The reform created a dedicated simplified insolvency track for microenterprises with several key advantages over ordinary concurso de acreedores:

Simplified access — filing does not require full representation by a lawyer and court agent in all phases, significantly reducing legal costs.

No automatic classification section — ordinary insolvency proceedings open a classification section that determines whether the insolvency is culpable and can result in personal director liability. The microenterprise track does not open this section automatically.

Lower administrator fees — insolvency administrator remuneration is calculated at substantially lower rates than in ordinary proceedings, reflecting the simpler scope.

Faster timelines — the procedure is designed to conclude in a matter of months, compared to the one-to-three year timeframe common in ordinary insolvencies.

Plan of continuation or liquidation — the debtor may propose a simplified continuation plan (equivalent of a convenio) or proceed directly to liquidation and then seek debt discharge (BEPI).

Practical Significance

The microenterprise procedure addresses a structural problem in the Spanish insolvency system: before 2022, the cost and complexity of ordinary insolvency proceedings meant that the smallest businesses — which represent the overwhelming majority of the Spanish economy — could not afford to access formal restructuring mechanisms. As a result, many insolvent microenterprises simply ceased trading informally, leaving debts unpaid and business owners indefinitely burdened by personal liabilities they could never repay. The reformed procedure makes the fresh start genuinely accessible.