The limited liability company (SRL) or limited company (SL) is the most widespread business constitution formula among small Spanish entrepreneurs. Let’s see why.
What is a Limited Society?
It is a type of commercial company in which each partner limits his liability to the capital that he contributes, avoiding responding with his personal assets to the company’s debts.
In any case, there must be a minimum of one partner to be able to establish an SL, without a maximum number, and they can be both natural and legal persons.
What types of Limited Liability Company are there?
Within this type of commercial companies there are several types to better adapt the corporate structure to the business needs of the entrepreneur: sole proprietorship, with a single partner; of new creation, for the recently constituted; in a regime of successive formation.
Which does not require an initial contribution of capital; labor, in which the majority of the social capital is owned by the workers; or professional, for collegiate professionals.
- Limited company new company
- SL unipersonal
- labor limited company
- professional limited company
Limited Company New Company
A new company limited company encourages the creation of new companies, simplifying and speeding up the incorporation procedures.
Since it can be processed electronically with the Single Electronic Document (DUE) within 48 hours after the execution of the public deed of incorporation .
There is also the option of doing it in person, for which you will have to have the company name and receive the Tax Identification Number (NIF) from the Tax Agency to later go to the notary and carry out the public deed.
The corporate purpose of this type of company is generic, which allows greater flexibility when carrying out the business activity and avoids subsequent modifications of the statutes.
In addition, the maximum number of partners is limited to five and all of them must be natural persons. It must have a share capital to be constituted of at least 3,000 euros and a maximum of 120,000 euros, divided into social shares.
SL Unipersonal
When a limited company has a single partner, it is called a sole proprietorship. It can occur because it was set up that way from the beginning or because as the project progresses the rest of the partners withdraw from it.
This formula is used mainly in the case of self-employed companies, in order to obtain the limitation of liability inherent to this type of company, or in companies that seek to create subsidiaries 100% controlled by them, but that have their own legal personality.
Labor Limited Company
For a limited company to be considered labor, it must meet some conditions:
- More than 50% of the share capital must be in the hands of workers with an indefinite contract.
- No partner has to own more than one third of the share capital.
- Permanent employees who are not partners may not exceed, with exceptions, 49% of the hours of work carried out by partners with a permanent contract per year.
- The minimum number of partners is 3.
Its legal regime would be like a company controlled by the workers. In addition, when a worker partner intends to sell his shares to someone who does not work there, there is an order of preference, giving priority to permanent workers who are not partners.
They also enjoy certain tax benefits, such as freely amortizing the fixed assets acquired during the first five years.
Professional Limited Company
Its corporate purpose is the exercise of a professional activity, for the performance of which a university or professional degree and registration in the corresponding professional association are required.
That is why it is usually a formula widely used by lawyers, architects, engineers or doctors who decide to join forces in a joint business project.
The professional partners must represent at least three quarters of the capital and the administrative body will also be made up of professionals.
How to create a Limited Company?
Incorporating a limited company is done through the drafting of the bylaws and the public deed signed before a notary and subsequently presented in the Mercantile Registry.
Previously, you must request the company name, in addition to registering with the tax administrations and paying the Patrimonial Transfer Tax rates.
Minimum Capital for a Limited Company
When creating an SL, it is necessary to have a capital made up of the contributions of all those partners, which in turn is divided into social, indivisible and cumulative shares.
These contributions must have an economic value, so they cannot be jobs or services, and at the time of setting up the company they must amount to at least 3,000 dollars.
In addition, it is necessary to detail the contributions made by each partner and the percentage of share capital that corresponds to it.
Articles of a Limited Company
As we have commented, it is necessary to prepare some bylaws to create the company, which is the pact where the rights and obligations of the partners and the rules that govern the company are grouped.
It must be drafted by a lawyer and it is an initial step for the constitution of the company, so they must be in the articles of incorporation.
As in any other company, it must include at least a series of aspects:
- Company name.
- Purpose of the company and trade name.
- Initial share capital and shares into which it is divided.
- registered office
- Duration of the company.
- Form of administration and who are its administrators.
- Distribution of profits and losses among partners.
- Reserve fund established.
- Bases to carry out the liquidation of the company.
- Start date of the activity of the company.
In the case of the limited company new company, it is not necessary that the concept of the object of the company be specific since it can vary circumstantially.
Final Words
The dissolution of the company can occur after an agreement of the shareholders’ meeting; for reasons of full right; for having elapsed the time stipulated in the statutes for its dissolution; or because a year has elapsed with a share capital below the legal minimum.
Along with these general causes, there are operational and legal causes that also justify the dissolution, such as the cessation of activity (if more than a year of inactivity has elapsed), the end of the purpose for which the company was established or the manifest impossibility of achieve the social purpose.
Once the causes that allow the dissolution of the company are confirmed, it must be approved by a majority of the partners, representing a minimum of one third of the share capital.
The settlement period then opens. The administrator must cease to hold office, and normally becomes the liquidator. This must carry out an inventory and a balance sheet of the company’s accounts.
He must also be in charge of collecting credits in favor of the company and paying outstanding debts to creditors; continue the pending businesses until they are concluded; end the labor relations between the company and its workers; and sell all the assets of the company.
Once the liquidation period has ended and the company’s assets have been divided, the liquidator must reach an agreement and execute a public deed and register it in the Mercantile Registry to request its registration cancellation.