Express Insolvency and No-Asset Insolvency: How to Close a Company with Debts Legally

Express insolvency (concurso exprés) and no-asset insolvency are simplified insolvency procedures established by Article 37 bis of the Texto Refundido de la Ley Concursal (TRLC, Legislative Royal Decree 1/2020) for companies whose assets are insufficient to meet the costs of ordinary insolvency proceedings. In these cases, the commercial court simultaneously declares the insolvency and its conclusion due to insufficiency of the estate, issuing a single order that closes the company and enables cancellation of its registration at the Mercantile Registry. The procedure allows a company to be legally dissolved and deregistered without the director needing to fund a full insolvency administration — resolving a situation that otherwise creates indefinite director liability under Articles 363 and 367 of the Ley de Sociedades de Capital (LSC).

Do you have a company with debts you cannot close?

This is more common than it might seem: a company that ceased operations one, two or five years ago, with outstanding debts to suppliers, the tax authority or social security, that cannot be formally dissolved because there are no assets to pay the creditors.

The ordinary route — voluntary dissolution and liquidation — requires the liquidator to pay all debts or for the shareholders to be personally liable for the shortfall. If there are insufficient assets and the shareholders cannot or will not make up the difference, the company is trapped in a legal limbo: it cannot close, it cannot operate, and the director continues to appear in the Companies Register with the liability that entails.

The Insolvency Act has a specific answer for this situation: no-asset insolvency and express insolvency, regulated under Art. 37bis of the TRLC. These are procedures designed to close companies with no assets legally, quickly and definitively — including registry cancellation.

How express insolvency and no-asset insolvency work

Art. 37bis TRLC provides that when a company’s active estate is insufficient to pay the claims against the estate (the costs of the insolvency proceedings themselves: insolvency administrator fees, court costs, last 30 days’ wages), the court can declare the insolvency and close it simultaneously.

The process works as follows:

Application and declaration. The director files a voluntary insolvency application with the commercial court, accompanied by the financial position statement, the asset inventory and the list of creditors. In the application itself, or in the days that follow, the court establishes that the active estate is insufficient.

Simultaneous closure order. If the active estate is insufficient for claims against the estate, the court issues in a single order the insolvency declaration and its conclusion due to estate insufficiency. There is no liquidation phase because there is nothing to liquidate. There is no insolvency administrator in most cases.

Registry cancellation. The closure order opens the culpability section (brief) and, after its close, the cancellation of the company’s Companies Register entry. The company ceases to exist as a legal entity.

The complete process can be completed in weeks or a few months — compared to the 12-24 months of ordinary insolvency proceedings — and at a significantly lower cost.

The BEPI route: personal debt discharge following insolvency

For directors or shareholders who are individuals who have given personal guarantees (bank sureties, bonds) for company debts, company closure does not automatically resolve their personal situation. Banks and other creditors can continue to pursue the guarantor even after the company has closed.

The fresh start mechanism (BEPI — Unsatisfied Debt Discharge Benefit) of the TRLC allows individuals to be released from these personal debts through a specific procedure. The individual applies for their own insolvency proceedings (or accesses the BEPI through the micro-enterprise procedure), and if they meet the good-faith insolvency requirements, the court can discharge the debts that could not be satisfied.

The Supreme Court judgments of February 2026 (STS 260/2026 and 254/2026) have extended the scope of the BEPI: public debt owed to AEAT and TGSS — which was previously almost entirely excluded — can now be partially discharged (surcharges, late payment interest and penalties, which are subordinated claims, are discharged in full; the principal can also be discharged within the established limits).

We coordinate the express insolvency proceedings for the company with the fresh start procedure for the director as an individual, to optimise the overall outcome and ensure that both closures — the company’s and the personal one — are achieved in the shortest possible time.

Closing a company with debts: options compared

Not all no-asset insolvency situations are the same. The main options are:

In many cases the optimal solution combines the company’s express insolvency with the director’s personal BEPI. The initial consultation is free of charge and we will determine the most appropriate route for your specific situation.