Business Structures: SA, SL, Cooperatives, and Individual Businesses
Understanding Different Business Structures
Sociedad Anónima (SA) – Corporation
- The minimum number of members to constitute an SA is one (sole shareholder).
- The minimum capital for setting up an SA is approximately €60,101.21. This capital is divided into equal parts called shares, which give shareholders rights such as voting at general meetings, receiving periodic information on the company’s situation and accounts, and receiving dividends.
- Shares can be traded on the stock exchange.
- The responsibility of members for the firm’s debts is limited to the capital contributed.
- The company pays corporate tax directly.
Sociedad Limitada (SL) – Limited Liability Company
SLs are also commercial companies with a total separation between the legal personality of the company and the physical personality of its members, sharing some features of SAs, especially limited liability.
- The minimum number of members to constitute an SL is one, referred to as shareholders or participatory members.
- The minimum capital required to form an SL is €3,005.06. This capital is split into equal parts called shares.
- Shares are not listed on stock exchanges.
Sociedad Limitada Nueva Empresa (SLNE) – New Enterprise Limited Company
To favor this type of company for entrepreneurs in Spain, a subtype called SLNE has been created, which can be incorporated online in 48 hours, facilitating the incorporation process. The SLNE must have between 1 and 5 members, who must be individuals. The capital must be a minimum of €3,012 and a maximum of €120,202.
Cooperatives
Cooperatives are commercial companies that seek not only economic benefits but also to achieve the common interests of their partners, which tend to be more social in nature.
- The minimum number of partners is 3, and members are called cooperatives, but this depends on the type of cooperative and varies by Autonomous Community.
Cooperatives in Catalonia
In Catalonia, there are first-degree cooperatives, formed by 5 individual members, and second-degree cooperatives, requiring only two cooperative partners.
- In Spain, most cooperatives are agricultural or livestock-related, but there are also cooperatives in the industrial sector (e.g., Abacus) and in the education sector (e.g., teachers forming a cooperative).
- Members must be employees of the company, and the selling price of their products or services differs for members and non-members.
- Cooperatives have a figure called a Controller, who seeks to control and verify the company’s accounts.
- Cooperatives pay corporate tax, and the liability of partners is limited to the capital contributed.
- There is no minimum capital formation requirement.
Individual Business
In this type of business, there is no separation between the legal and physical person; therefore, the entrepreneur’s responsibility for the firm’s debts is unlimited, even extending to their personal assets.
- Taxed by IRPF (Income Tax on Individuals).
- No minimum capital formation requirement.
- Examples: A taxi driver, a trucker, an actor, a chauffeur.
Creating a Company: Steps and Content of a Business Plan
A business plan is a document drawn up by the promoters of a business, detailing its characteristics and analyzing its feasibility.
The utility of formulating a business plan is twofold: it serves as a tool for reflection on their project for the entrepreneur, and it is also an excellent letter to other people or organizations that may become involved in the project, such as financial institutions, funding authorities, or potential partners.
A business plan has a set structure with specific parts.