Spanish Company Legal Structures & Requirements

Posted on Apr 11, 2025 in Law

Understanding Spanish Company Legal Forms

Choosing the right legal structure is crucial. Key factors include the number of partners, liability exposure, minimum equity requirements, and tax implications.

Company Types Overview

• Sole Proprietorship
• Partnerships:
  1. Commercial Partnerships:
     • Collective Partnership
     • Limited Partnership (Sociedad Comanditaria)
     • Limited Liability Company (Sociedad de Responsabilidad Limitada)
     • Public Limited Company (Sociedad Anónima)
     • Worker-Owned Company (Sociedad Laboral)
  2. Cooperative Societies
  3. Non-commercial Societies:
     • Community of Goods (Comunidad de Bienes)
     • Civil Society (Sociedad Civil)

Sole Proprietorship (Empresario Individual)

• Simplicity: Easiest to set up with minimal formalities.
• Common Sectors: Widely used in agriculture and trade.
• Liability: Unlimited liability (personal assets are at risk).
• Capital: No minimum capital requirement.
• Taxation: Subject to Personal Income Tax (IRPF), based on profit percentage.
• Social Security: Owner registers under the self-employed regime (régimen de autónomos).
• Name: Free choice of business name.

Commercial Partnerships

These involve an association of natural or legal persons, formally established through registration of the constitutional deed at the Mercantile Registry. Dissolution typically occurs by the partners’ decision or extinction of the company’s assets.

Collective Partnership (Sociedad Colectiva)

• Contributions: Partners contribute capital and/or work.
• Profit Sharing: Profits are shared based on contributions.
• Transferability: Participation cannot be transferred without partners’ agreement.
• Minimum Partners: 2.
• Minimum Capital: None.
• Taxation: Subject to Corporate Tax (Impuesto sobre Sociedades).
• Social Security: Partners typically register under the self-employed regime.
• Name: Must include the name of at least one partner, followed by “y Compañía” or similar (e.g., “… y Cía.”).
• Partner Types:
  • Collective Partners: Contribute capital and/or work. Registered under the self-employed regime. Liability: Subsidiary (liable if the company cannot pay), solidarity (creditors can claim the full debt from any partner), and unlimited (liable with all personal assets).
  • Industrial Partners: Contribute only work. Not liable for losses unless agreed otherwise. Often considered junior partners. Registered under the self-employed regime.

Limited Partnership (Sociedad Comanditaria)

• Types:
  • Simple Limited Partnership (Sociedad Comanditaria Simple): Minimum 2 partners (at least one general partner contributing work/capital, and at least one limited partner contributing only capital).
  • Limited Partnership by Shares (Sociedad Comanditaria por Acciones): Minimum 2 partners (at least one general partner, capital divided into shares in €).
• Profit Sharing: Proportional to shares/contributions.
• Partner Types:
  • General Partners (Colectivos): Manage the company. Liability: Subsidiary, solidarity, and unlimited. Registered under the self-employed regime.
  • Limited Partners (Comanditarios): Do not manage the company. Liability: Limited to their capital contribution. May have different Social Security requirements.
• Minimum Partners: 2 for both types (Simple and by Shares).
• Minimum Capital: None for Simple; €60,100 for Partnership by Shares.
• Taxation: Subject to Corporate Tax.
• Social Security: General partners usually under the self-employed regime.
• Name: Must include the name of at least one general partner, followed by “y Cía, S. en C.” or “y Cía, S. Com. por A.”.

Limited Liability Company (Sociedad Limitada – SL/SRL)

• Liability: Limited to the capital contributed by each partner, protecting personal assets. This structure favors attracting partners without compromising their personal wealth.
• Minimum Partners: 1 (can be a single-member company, “Sociedad Limitada Unipersonal”).
• Minimum Capital: €3,005 (divided into participations, not shares).
• Taxation: Subject to Corporate Tax.
• Social Security: Working partners/directors usually register under the self-employed or general regime depending on control.
• Name: Must include “Sociedad Limitada” or “SL” / “Sociedad de Responsabilidad Limitada” or “SRL”.
• Transfer of Participations: Generally open to family members; transfers to third parties are often restricted by company statutes or law.
• Equity & Governance:
  • Partner Influence: Decision-making influence is proportional to participation stakes.
  • Profit Distribution: Profits are distributed proportionally to participation.
  • Preferential Rights: Members usually have preferential rights to acquire participations if another member sells.
  • Governing Bodies:
    • General Meeting (Junta General): The main decision-making body. Must meet at least once a year. Appoints administrators. Mandatory if more than 15 partners (?).
    • Administrator(s) (Administradores): Manage the company, prepare annual accounts (within specified deadlines, e.g., 3 months after year-end, not 5 months max), and represent the company.

Public Limited Company (Sociedad Anónima – SA)

• Capital Attraction: Designed to attract large amounts of capital and numerous investors (partners).
• Share Transferability: Shares are generally freely transferable (can be nominal or bearer, offering potential anonymity).
• Shareholder Rights:
  • Influence decisions at the General Meeting.
  • Receive profits (dividends) proportional to shares held.
  • Preferential subscription rights for new shares.
• Liability: Limited to the capital contribution of each shareholder.
• Minimum Partners: 1 (can be a single-member company, “Sociedad Anónima Unipersonal”).
• Minimum Capital: €60,100, fully subscribed, with at least 25% paid up at incorporation.
• Taxation: Subject to Corporate Tax.
• Social Security: Employees under the general regime; directors/partners may be under general or self-employed regimes depending on role and control.
• Name: Must include “Sociedad Anónima” or “SA”.

Worker-Owned Company (Sociedad Laboral – SLL/SAL)

• Ownership Structure: At least 51% of the capital must be owned by workers with permanent, full-time contracts.
• Purpose: Promotes worker access to the means of production and equality of opportunity. May benefit from subsidies and tax advantages.
• Member Types:
  • Working Partners: Hold permanent, full-time contracts and own capital.
  • Non-Working Partners: Can hold shares or participations, but generally cannot exceed one-third of the total capital per individual.
  • Salaried Workers: Non-partner employees (can be indefinite). Their total hours worked per year are limited (e.g., cannot exceed 15% of total hours worked by working partners, or 25% if the company has fewer than 25 workers).
• Liability: Generally limited to the partner’s contribution.
• Minimum Partners: 3, at least 2 of whom must be working partners.
• Minimum Capital: €3,005 for SLL (Limited Liability Worker Company); €60,100 for SAL (Public Limited Worker Company).
• Taxation: Subject to Corporate Tax.
• Social Security: Working partners usually under the general or self-employed regime.
• Name: Must include “Sociedad Anónima Laboral” (SAL) or “Sociedad de Responsabilidad Limitada Laboral” (SLL).

Cooperative Society (Sociedad Cooperativa)

• Nature: An association of people with common economic and social needs.
• Governing Principles:
  • Autonomy & Independence: Not dependent on political organizations.
  • Democratic Member Control: Members have equal rights and obligations.
  • Member Economic Participation: Benefits (cooperative returns) are distributed equitably based on participation. Members contribute capital.
  • Education, Training, and Information: Provide education and training for members and promote cooperation.
  • Voluntary and Open Membership: Membership is open to those who meet requirements, subject to the cooperative’s capacity (leading to variable capital).
• Minimum Partners: Generally 3 cooperative members (may vary by region/type).