Despite the public aid provided during the health crisis, many companies were unable to overcome the complications in developing their activity in 2022. In addition, the problems derived from COVID-19 were joined by the crisis caused by the war in Ukraine and skyrocketing inflation.
The result of this troubled sea is shown by the data from the National Institute of Statistics (INE): In 2022, 26,207 companies were dissolved or closed. This is 10% more than the previous year and the highest figure since the data series was recorded. It has even broken the mark of the year 2013, when more than 24,000 companies closed.
More than 6,000 companies filed for bankruptcy, according to data from the Business Radar for Bankruptcy and Company Creation and Dissolutions. The commercial, construction, manufacturing, hospitality, and professional, scientific, and technical sectors accounted for more than two-thirds of the total tenders submitted in Spain in 2022.
Going into the detail of the 26,207 company closures, one can appreciate how the business fabric has dissolved:
And this is also transferred to figures that are not optimistic in terms of the constitution of new companies: there was the largest drop in a month of December since 2018. After it shot up 27.8% in 2021 after the end of the restrictions associated with the pandemic, only in December 2022 the number of new companies decreased by 5.3%, 2.1% overall for the year.
It has also been a negative year for the self-employed: in the last six months of 2022, more than 43,000 self-employed workers were lost, some 671 self-employed workers per day, the worst figure since 2012.
Around 20% of the companies created in Spain do not stay open for even one year
According to INE data, moreover, only 45% of these companies manage to get to work five years after their creation. Spain is the sixth country in the European Union with the lowest survival rate of companies.
The economic slowdown, the end of the bankruptcy moratorium, the energy and raw materials crisis and inflation may lead to an increase in defaults and delinquency. Small and medium-sized companies that, according to data from June 2022 from the Ministry of Industry, Commerce and Tourism, account for 97% of companies in Spain, have less capacity to transfer cost increases in their prices.
This drags them to a reduction in margins and to losing their profitability and, in the worst case, to declaring an express bankruptcy to close the company. In 2022, 7,272 bankruptcy proceedings were registered, shooting up 24% after the end of the bankruptcy moratorium in June 2022.
A company without activity continues to maintain a series of economic and fiscal obligations. Not complying with them may lead to the possible imposition of sanctions. If there are holes in the cash box that are difficult to solve, if the operating result of the business is always negative, if it is impossible to repair the gap between the billing period and the collection period or if there is too much dependence on public aid, it may be time to assess the closing of the business.
Professional and even legal advice will be very important to complete all the procedures for the dissolution or closure of a company and avoid further complications.
In the case of being a self-employed worker, you must apply for withdrawal from the Special Scheme for Self-Employed Workers (RETA) and from the Tax Agency, without failing to attend to pending payments or contributions.
In the case of a company or partnership, some of the steps to follow to leave the company inactive are the following:
The procedures and steps will depend on whether the company is closed with losses, or because it does not compensate or is not profitable and another project is to be launched. The laws, regulations and procedures will set the times, as well as the final cost of the process of closing the company. If the business is idle and a sole proprietorship, it may have no debts or workers and the cost of closing may be low. In any case, having experts will be an advantage to close the company without more complications than desired.
