GuillermoRosés SRLU

Many businesses start trading with minimum capital and as a result of initial losses and the limits on decapitalisation that are laid down in the commercial legislation in order to safeguard third party interests, they only embark on the process of adjusting their capital and reserves late in the day, thereby incurring variable financial penalties which could have been avoided; penalties which are also incurred in other circumstances, as a result of the delay in adopting measures in relation to the restructuring of costs, changes in commercial strategy or changes to the financing policy of the business.

In all these cases decisions are made too late in the day, when they could have been made at an earlier point in time without any financial penalties arising. Penalties deriving from crises which, depending on the circumstances giving rise to them, may even mean that the business has to cease trading, that the principle of limited liability which underpins the existence of the commercial company ceases to apply or that there is a loss of autonomy when it comes to running the company.

In other cases the same circumstances apply to companies that have been debt-free and profitable but cease to be so because they have not been able to react in time to a worsening of their risk ratios.

That is why it is necessary to embark on a practical study of the critical aspects that the business has to look out for in order to spot the arrival of a crisis in time in order to highlight the benefits of having regular preventive control and to alert the company to the presence of risk situations that may occur in the course of the business’s life so that it is easier for the board of directors or, where appropriate, the general meeting of shareholders or members to adopt early corrective measures. As with a chess game, the business must be aware of the fact that the time factor is a decisive element when it comes to survival.