The Limited Liability Company (S.L.) is the most widespread type of commercial company in Spain when starting a business. It is the most suitable company for the majority of small and medium-sized ventures due to the high level of flexibility in its business structure.

The limited liability company in Spain can be registered with a single partner and there is no limit to the maximum number of shareholders. In the case of setting up a Limited Company in Spain with a single partner (Sociedad Limitada Unipersonal), this must be shown on all documentation, correspondence, or legal announcements (S.L.U.).

What is the minimum amount of capital needed to set up a Limited Company in Spain?

Only 3,000 euros are required as minimum capital to set up a Limited Liability Company. Contributions can be different assets, such as cash, credit rights, or real estate (in no case may jobs or services be the object of a contribution of capital).

Said capital must be fully subscribed and paid up at the time of the incorporation of the limited liability company.

  • The capital is divided into shares, which can be transferred freely between partners, spouses, grandparents, parents, or descendants, or companies in the same group, as long as the statutes of the company do not provide otherwise.

  • Only assets or patrimonial rights that can be valued economically can be the object of a contribution of capital and not work or services.

  • The partners of a Limited Company in Spain are not personally liable for corporate debts. It is the company that responds unlimitedly with all its present and future assets, while the partners limit their responsibility and risk to the contribution they make to the capital. However, it is important to bear in mind that this is not always the case, since there are different specific cases in which Spanish law imposes a special responsibility on the partners.

Incorporation of a Limited Company in Spain

The incorporation of a Limited Liability Company in Spain is carried out through statutes and public deed signed before a public notary and submitted to the Mercantile Registry. Our professionals can help you with the preparation of all the notarial documents for the incorporation of a Limited Company in Spain. Contact our company incorporation service in Spain for more information.

  • The corporate name (the name by which the company will be known) must be unique and must be duly expressed in the company’s incorporation document. The choice is free, although certain limitations must be taken into account (for example, it is not possible to adopt a name that is identical to that of any other pre-existing company).

The name of the limited liability company must include the indication “Sociedad de Responsabilidad Limitada”, “Sociedad Limitada”, or their abbreviations “S.R.L.” or “S.L.”

What taxes must Limited Companies pay in Spain?

Regarding the tax regime, in the case of setting up a Limited Company in Spain, Corporation Tax (IS) must be paid.

  • The corresponding periodic Value Added Tax returns (IVA) must also be submitted. Adlanter can help you with tax management in Spain, as well as with the submission of your company’s tax returns within the country.
  • The corporate bodies of a Limited Company are the General Meeting of Partners, the administrators, and the rights of the members.

A limited liability company must keep an inventory book and annual accounts, a journal and a book of minutes in which all the resolutions taken by the General and Special Meetings will be collected.

Opportunities and limitations of a Limited Company in Spain

OPPORTUNITIES

LIMITATIONS
It is ideal for small and medium businesses. There are legal limitations when it comes to transferring shares.
It has a simple and flexible legal regime compared to other types of companies in Spain. It is easy to establish. It is mandatory to carry out formal accounting, for which in many cases the help of an advisor is necessary.
The responsibility of the partners for company debts is limited to the capital contributed (except in certain specific cases established by the regulations). The limited company is subject to certain procedures and fiscal and bureaucratic obligations.
The choice of the company name is governed by free will. However, there are certain limits. These companies cannot be listed on the stock market, although in most cases this is never a real possibility.
The minimum share capital required for its incorporation is very low. The partners are always identifiable.
You can contribute capital both in cash and in real estate, for example.
There is no minimum limit of partners required for incorporation.
There is freedom to make agreements and to pact between the partners.

 

The Limited Company in Spain has many advantages for small and medium-sized companies that want to start a business here. However, it is always advisable to analyze the situation in a personalized way to check what type of company is the most appropriate for your case. If you would like to receive advice on creating a company in Spain, contact our service for incorporating companies in Spain.