Section I -Types of corporations
- Types of corporations
- Sole proprietorship
A foreign
single person may start a business in Spain. He must have legal capacity,
according with the law of his home country, to carry on businesses activities.
It would be
advisable to have the assistance of a Professional in order to set up
your company in Spain.
- Stock corporation
Stock
corporations (Sociedad Anónima – S.A.) are normally used in Spain for
investments in major projects.
The deed of
incorporation must be signed before a notary and then registered at the Spanish
Corporate Registry (Registro Mercantil). A single person can form this type of
company.
The minimum
share capital is € 60,101.21. Contributions may be made in the form of
money, goods or intellectual property, which can be valued. Work is not valid
as a capital contribution.
The
shareholders are not personally liable for corporate debts; they are only
liable to the extent of their contribution to the corporate.
- Limited Liability Company
The Limited
Liability Company (Sociedad de Responsabilidad Limitada – S.L.) is
normally used in Spain to form small or medium sized businesses, it may be
created by a single founder.
The deed of
incorporation must be signed before a notary and then registered at the
Corporate Registry (Registro Mercantil).
The minimum
capital requirements are € 3,005.06, which must be fully subscribed
and paid-up at the time that the company is set-up. Contributions may consist
of credit rights, real property, etc. Work is not valid as a capital
contribution.
Partners are
not personally liable for company’s debts; their liability is limited
to their investment in the company. Only one shareholder is needed, however
there is no limit on the number of shareholders.
- Worker’s partnerships
In this type
of company the share capital of Cooperatives (Cooperativas) and Labour
Corporations (Sociedades Laborales) is owned by the workers.
- Joint Ventures
Joint
Ventures in Spain may use different forms.
- A group of companies can form temporary business associations (uniones temporales de empresas – UTE) to carry on specific projects for a limited time, each company will keep its legal status.
- Economic Interest Groups (Agrupación de Interés Económico – AIE); which are set up to help their members to achieve their individual objectives; its members are liable for the company debts.
- Entrepreneurs may agree to contribute with money or in kind to a venture that they do not manage (contrato de cuentas en participación), the non-managing participants do not become shareholders, they receive the right to an agreed share of the profit resulting from the venture.
- Branches
The branch
is an organization depending on its parent company, which is located abroad. It
has the same legal personality as its parent company and runs similar activity.
A branch has
to be set up through a public deed made before a notary and registered at the
Corporate Registry.
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