Business Structures and Financial Planning for Entrepreneurs

Posted on Jan 5, 2025 in Teaching & Education

**Business Structures**

**Sole Proprietorship**

  • Characteristics: An individual, a natural person, carries out a professional, industrial, or commercial activity in their own name, either directly or through a company.
  • Minimum Capital: Not required.
  • Requirements: National Identity Document (DNI). Voluntary registration in the commercial register.

**General Partnership**

  • Characteristics: The partnership operates in a personalist, collective manner, with unlimited and joint liability among partners.
  • Minimum Capital: Not required.
  • Requirements: Two or more partners. Registration of the partnership agreement in the commercial register.

**Limited Partnership**

  • Characteristics: A partnership with general partners who have unlimited liability and limited partners whose liability is limited to their capital contribution. Only general partners can engage in commercial activities.
  • Minimum Capital: Not required.
  • Requirements: Two or more partners (general and limited). Registration of the partnership agreement in the commercial register.

**Limited Liability Company (LLC)**

  • Characteristics: Commercial capital is divided into equal and indivisible shares, which cannot be incorporated into negotiable securities. The liability of the partners is limited to the contributed capital.
  • Minimum Capital: 3005.06 euros.
  • Requirements: One or more partners. A board of directors and a general meeting. Registration of the company’s bylaws in the commercial register.

**New Limited Liability Company (New LLC)**

  • Characteristics: A special type of LLC that reduces the time for incorporation.
  • Minimum Capital: 3012 euros.
  • Maximum Capital: 120,202 euros.
  • Requirements: Between one and five partners. A sole administrator or a board of directors. Registration of the company’s bylaws in the commercial register.

**Public Limited Company (PLC)**

  • Characteristics: Capital is divided into shares. The principle of limited liability applies to the partners.
  • Minimum Capital: 60,101.21 euros.
  • Requirements: One or more shareholders. A general meeting and a board of directors. Registration of the company’s bylaws in the commercial register.

**Worker-Owned Limited Company**

  • Characteristics: Working capital belongs mostly to the workers, who provide their personal services directly and indefinitely.
  • Minimum Capital:
    • SLL: 3005.06 euros
    • SAL: 60,101.21 euros
  • Requirements: Three or more partners. Registration of the company’s bylaws and registration in the register of worker-owned companies.

**Cooperative**

  • Characteristics: Provides jobs to its members through their personal effort, directly and on a part-time or full-time basis, through a common organization in the production of goods and services for third parties.
  • Minimum Capital: As determined by the bylaws, unless otherwise stated.
  • Requirements: Three or more members. A general assembly, a governing council, and auditors. Registration of the cooperative’s bylaws in the register of cooperatives.

**Community of Property**

  • Characteristics: A contract where the ownership of a thing or right belongs to several people jointly.
  • Minimum Capital: Not required.
  • Requirements: Two or more co-owners. A verbal or written contract.

**Civil Partnership**

  • Characteristics: Two or more people agree to pool money, goods, or industry with the intention of sharing profits.
  • Minimum Capital: Not required.
  • Requirements: Two or more partners. A verbal or written contract.

**Business Plan**

  • Product Details: Describe the product or service (time, workers, cost, investments).
  • Product or Service Description: Insert characteristics, weight, volume, materials, form, color, texture.
  • Number of Units Produced
  • Production Phases: Organization of the creation steps.
  • Time Calculation: (May include downtime for breaks).
  • Employment Contract: Agreement between worker and business.
  • Collective Agreement: Negotiation of the contract by representatives to regulate working conditions.
  • Warehouse Management: Insurance, rent for the warehouse, reserve a safety stock for contingencies.
  • Investments: Expenses incurred by the company for assets (premises, machinery, tools, vehicles, facilities, furniture, initial setup).

**Financial Resources**

  • Venture Capital Firms (for small businesses)
  • Loans: Received in full, interest is paid from the first day throughout the year. There may be a penalty for early repayment. Never run out of liquidity.
  • Renting: Only for movable property. Maintenance is provided by the lessor. Minimum duration without a set term. The fee is fully deductible.
  • Leasing: Can be done with movable and immovable property. The landlord provides maintenance. Minimum duration of 2 years for movable property and 10 years for immovable property. There are limits to the deductibility of the fee.
  • Credit: Money is made available to the client. Interest is paid only on the amount used. It can be repaid at any time. Always have a buffer for liquidity.
  • Subsidies
  • Financing from Suppliers
  • Overdraft
  • Commercial Discount: Advance collection of a bill of exchange for which a bank charges interest and a commission.
  • Factoring
  • Extending Payment Terms to Suppliers
  • SME (Small and Medium-Sized Enterprise): Up to 250 workers, a turnover of up to 40 million euros, or a balance sheet of up to 27 million euros. It cannot be owned by a large corporation or have more than 25% of its capital held by a large corporation.

**Decision Making**

  • Investment Plan: To manufacture products.
  • Expenses: Obtaining the product.
  • Financial: Determining economic viability.
  • Confirmation: Pay on time.
  • Treasury Account: Treasury deficit due to lack of cash.