Sangong shows you what to do now
Update Financial support for gastronomic businesses
The Federal Department for Economic Affairs and Energy has now specified the requirements for payment of the so-called extraordinary economic aid.
First of all, it has been confirmed that the financial aid must be requested via the website www.ueberbrueckungshilfe-unternehmen.de. Self-employed individuals who do not apply for support of more than 5.000,00 EUR are not required to have a controller (tax advisor, lawyer, etc.) for the application.
For companies in the form of a GmbH and UG (limited liability), it is not the time of establishment that is relevant, but the time operations started. For example, if a GmbH was founded in May 2019, but did not start operations until May 2020, the GmbH should be entitled to receive financial aid based on its turnover of October 2020.
Companies will receive compensation of 75% of the turnover the company made during the same period of the previous year. The Federal Department for Economic Affairs and Energy has now also answered the question of how take-away services, i.e. deliveries and self-pickup (“To-Go“) will be dealt with when applying for extraordinary economic aid.
In the following, Sangong law firm will illustrate the financial support a permanently closed restaurant would receive and the financial support a restaurant that is open for take-away sales would receive:
Version 1: The restaurant closes permanently for November 2020 and does not offer any take-away services.
Turnover November 2019
Total 10,000.00 EUR
> Of which in the restaurant 8,000.00 EUR
> Of which take-away 2,000.00 EUR
Entitlement to support in November 2020:
In November 2020 the restaurant would receive financial aid in the amount of 75% of the turnover it made during the same period of the previous year. In this case the restaurant made a total of 10,000.00 EUR in November 2019. The restaurant therefore receives 7.500,00 EUR compensation, minus any other official support it may have received, such as short-time allowance.
Version 2: The restaurant opens for take-away sales in November 2020.
Sales November 2019
Total 10,000.00 EUR
> Of which in the restaurant 8,000.00 EUR
> Of which take-away 2,000.00 EUR
Entitlement to support in November 2020:
The restaurant receives financial aid in the amount of 75% of 8,000.00 EUR (not 10,000.00 EUR!). When calculating financial aid, turnover made through take-away services in November 2019 will not be taken into account. Therefore, the restaurant receives financial support to the amount of 6,000.00 EUR.
The restaurant can make extra turnover through take-away services (deliveries, pick-up). The absolute limit for additional earnings is 100% of the total amount of turnover made in November 2019. In the example, the total amount of turnover was 10,000.00 EUR. The restaurant in the example may not make more than 4,000.00 EUR turnover through take-away services without any deductions from government support, which it already received or receives.
This content has been compiled based on the currently available information. The information is therefore not legally binding.
Financial support for gastronomic businesses
Due to the developments of the corona pandemic, new regulations have been in effect since November 2, 2020. The gastronomy business is also affected by the extensive restrictions in the private and public sector. Restaurants must close by November 30, 2020. Exceptions only apply to delivery or pick up of food. In order to compensate for the financial losses, it was decided that restaurants would be reimbursed 75% of the turnover of the same month last year if the company has no more than 50 employees. It is a so-called extraordinary economic aid.
Questions from our clients
Clients of Sangong law firm have frequently the following questions, which should be answered here in general for interested gastronomic businesses:
- How do I get my financial aid?
- When will I get my financial aid?
- How high will the support be?
- Does the financial aid also apply to companies that are still delivering or preparing food for collection ("To-Go")?
- What if I had not opened in the year before? Will I still get financial aid?
- As of November 2, 2020, the federal government is still working on making the application and processing feasible. It is intended that the application procedure will be executed by the website www.ueberbrueckungshilfe-unternehmen.de.
- This is also not yet clear as of November 2, 2020. The possibility of an advance payment is currently being examined.
- According to the Federal Department of Finance, restaurants should in particular be reimbursed for their fixed costs. These are the costs that arise despite a closure. To keep the approval simple, 75% of the corresponding turnover of the same period of the year before or the month before should be reimbursed.
- The resolution does not contain any information on this. It cannot be ruled out that a reimbursement is not possible or only possible to a lesser extent in these cases.
- Young companies founded after November 2019 should be allowed to use October 2020 sales as a benchmark. It is currently still completely unclear what happens to companies that were founded as GmbH or UG (limited liability) in November 2019 or before and only started their business activities later.
It must also be pointed out that the extraordinary economic aid for the relevant period of October 2020 will be cleared against other support programs already received, such as short-time working allowance.
Experience has shown that federal or state support is actually not as easy to obtain as announced by authorities. Here, too, it remains to be seen how the program will actually be implemented.
Law to mitigate the consequences of the COVID-19 pandemic in civil, insolvency and criminal procedure law
Deferral of tax payments and adjustment of tax prepayments
The consequences of the spread of the corona virus and the COVID-19 disease it causes cannot yet be foreseen. It is all the more important to take all possible measures at an early stage in order to avert further damage to your company. Please also keep in mind that there will be a time after the corona virus. During this time you want to start concentrating exclusively on your business activities and not carry unnecessary legal and economic problems with you. Sangong law firm will help you weather the crisis and then get your company back on course in the sails with the wind.
Below you will find understandable explanations on legal issues in connection with the spread of the CORONA virus and the COVID-19 disease it causes.
The site is constantly being revised.
On 27th March 2020 a new law cames into force, which is supposed to make things easier for entrepreneurs and citizens in many areas. The measures decided are in addition to financial aid granted by the KfW and the Landesbanken.
Against the background of the measures adopted, it can be assumed that the federal government also assumes that financial aid will not be granted as quickly as desired.
CONSUMERS who concluded a loan agreement before 15th March 2020, may defer the repayment or repayment of interest that is due between 1st April 2020 and 30th June 2020 for a period of three months. The prerequisite for this is the consumer's loss of income due to the Corona virus (COVID-19), which means that his or her reasonable livelihood or livelihood towards dependent persons is at risk. Lender and consumer can make a separate agreement for repayment. If this does not materialize, the contract term and the due date are extended by three months. In this case, termination by the lender due to default in payment or due to a significant deterioration in the consumer's financial situation or the value of a security provided for the loan until the deferral has expired, if this is reasonable for the lender.
ENTREPRENEURS were initially also taken into account by this provision. In the final version of the law this is no longer the case. This is unfortunate. There is hope, however. The federal government is empowered to change the personal scope of application by ordinance without the consent of the Bundesrat. This means that companies that have to service corporate loans can benefit from this rule at a later point in time.
The landlord may not terminate a tenancy agreement if the tenant cannot pay the rent despite the due date, if the reason for the non-performance is the corona virus (COVID-19). This applies to ENTREPRENEURS and CONSUMERS. However, the connection between the COVID-19 pandemic and non-performance is required (subject to criminal penalties). The landlord may still terminate the contract for other reasons.
The regulation contained in the first draft that the rental payment must be deferred and that it is legally presumed that the non-payment is due to the corona virus (COVID-19) is no longer included in the law that has now come into force.
Usually, bankruptcy must be filed within three weeks of insolvency or over-indebtedness. If this does not happen, the person concerned is liable to prosecution and may be liable with his or her property.
The obligation to apply for bankruptcy is now temporarily suspended for companies until 30th September 2020. This should give companies the opportunity to avail themselves of state aid or to make restructuring or financing agreements. However, this only applies in the event that the bankruptcy is due to the effects of the corona virus (COVID-19). Anyone who was solvent by 31st December 2019 is presumed to be the cause of the bankruptcy due to the effects of the corona virus (COVID-19).
The liability of the managing director for actions during this time that are potentially capable of reducing the bankruptcy estate is also suspended.
In particular, legal acts that grant or enable the other party to secure or satisfy themselves cannot be challenged in later insolvency proceedings. If, for example, a company sells a motor vehicle or inventory to a third party, this legal act cannot be challenged retrospectively, provided that the reason for the bankruptcy is the effects of the corona virus (COVID-19).
Right now there is the possibility for companies to restructure through internal changes, renegotiation of agreements and company sales or split-ups.
Too few indebted companies still use the opportunity to draw up an insolvency plan. Of 174,019 bankruptcies opened, just 2,078 took advantage of the opportunity to submit an insolvency plan. The current situation, on the one hand legal relief, on the other hand state financial aid, should convince more companies to make use of this instrument. Every insolvency plan consists of a descriptive and a creative part. The performing part describes the development of the company towards insolvency and the concrete measures for a reorganization. The creative part informs creditors and the bankruptcy court how the goals can be achieved. An essential part of this is the examination of the renovation ability. In addition, it is important to convince the believers in the assembly.
In-depth legal knowledge as well as economic understanding are imperative for a successful insolvency plan. Trust the experience of the Sangong law firm.
Order of short-time work
Employers are generally allowed to order short-time working in their companies if there is a significant loss of work that leads to loss of earnings for the employees employed in the company. The prerequisite for a loss of work to be significant is, in particular, that it is due to economic causes or an inevitable event. Economic causes can be, for example, a corona virus-related order or material shortage. Unavoidable events can in particular represent official measures to contain the corona virus.
Display of absence from work
The loss of work must be reported to the local employment agency. At the same time, it is necessary to make the loss of work and its relevance credible. If the credibility is proven, the Employment Agency pays the affected employees short-time work allowance for a period of up to one year. This amounts to at least 60% of the lost net remuneration. In addition, the social security contributions incurred for the lost working hours are fully reimbursed.
Short-time working allowance is paid at the earliest from the month in which the notification is received. If the loss of work occurred in March 2020, the notification must be received by the Employment Agency this month. If the loss of work is due to an unavoidable event, the notification must also be made immediately so that it is valid for the month in which the event occurred. In particular, if you are absent from work due to official measures taken in March 2020, you should not wait a day longer than necessary before reporting.
Application for short-time allowance
An application from the employer is also required so that short-time work benefits are paid and the social security contributions are covered. This must be submitted within a period of three months from the month for which the short-time allowance is requested.
Taxpayers who are directly and not insignificantly affected by economic damage due to the corona virus can submit applications for deferral of taxes due or becoming due up to this point in time by 31th December 2020.
Applications for adjustments to the income and corporate tax prepayments can also be submitted up to this point.
In both cases, it is basically necessary to prove that no taxes can currently be paid due to the effects of the corona virus. However, proof of damage in detail is not necessary. Rather, in both cases mentioned, the tax offices are encouraged to act generously when examining the application requirements.