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What Happens If My Company Experiences Losses During the Previous Year?

If your company has suffered losses during the year, to avoid bankruptcy, it is necessary to balance the company's books so that it reaches the minimum amount required to cover its share capital, as required by law. This can be done in several ways:

One option would be to increase the company's share capital and make the payment of that share capital. If you have questions about how to pay (and optionally increase) the share capital, read this article.

If you run a startup or a technology company, another option is to declare these expenses as intangible assets that can be proven. For example, development and design expenses could be proven if it is shown that they have been invested in the development and construction of the platform or technological infrastructure. In that case, we need a letter signed digitally by the shareholders of the company explaining that the expenses are due to intangible assets X and Y, and that their value is intrinsically invested in the company and its technology platform.

Finally, if you gave the business a loan and the business hasn't paid, that can also lead to bankruptcy. To avoid this, you can give up your rights to ask your company to pay you back. In that case, we also need a letter signed digitally by all the shareholders, expressing this resignation.

If you have questions about which may be the best option for you, contact our customer service team at this link.

Updated on: 11/08/2022

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