A Spanish SL is actually a limited liability company or sociedad limitada. It represents the most popular type of business in Spain, for both local and foreign investors. The limited liability company is characterized by a high degree of flexibility, considering that the shareholders are allowed to establish their own rules inside the company. A Spanish SL usually is used for small and medium sized companies andour team of specialists in company formation in Spain can advise on the registration of this business form.
More details on the Spanish SL (limited liability company) are available in the presentation below:
2. What is the minimum share capital for an SL in Spain in 2021?
At least EUR 3,000 have to be provided in order for the limited liability company to be established in Spain. Contributions can be made in a wide category of assets, such as cash, credit rights, real estate property or any others. No expert’s evaluation is required. The capital is divided into shares, which are not free for transfer and investors can receive further information on the share capital from our team of representatives in company registration in Spain.
It is important to know that the shares of a Spanish limited liability company can’t be sold, but they may be transferred to specific types of entities. For example the shares of the company can be transferred within the company, to its members, or to the close family members of the shareholders. At the same time, the shares can also be transferred to other companies, provided that the SL is included into a group of companies.
The presentation below provides information on the steps necessary for opening a Spanish SL:
3. How many shareholders are necessary for an SL in Spain?
The limited liability company in Spain can be registered with only one shareholder, having no limit with regards on the maximum number of shareholders. The shareholdersof the Spanish SL are liable for the company’s debts only to the extent of their contribution to the company’s capital. It is also important to know that this business form allows the registration with 100% foreign ownership.
4. What is the management structure for a Spanish SL?
A board of directors has to be appointed when starting a SL in Spain, which has to be comprised of minimum three and maximum twelve members. It is important to know that a director can be elected for an unlimited period during the general meeting of the shareholders.Another feature of the Spanish SL is given by the fact that the directors of the company can’t have the quality of shareholders and they are elected by the general meeting, which represents the highest managing body in rank of a Spanish company.
5. How can an SL in Spain be verified?
It is not necessary to keep accounting documentation according to the Spanish law, but all records must be available on request, if the Spanish authorities want to evaluate them. Financial statements must be completed annually and anychanges regarding the organization of the company or its statutory documents have to be approved by the general meeting of the shareholders.
The Spanish legislation referring toaccounting proceduresapplicable to Spanish companies is given by the Spanish Generally Accepted Accounting Principles (GAAP). This is also available for a limited liability company, which must offer complete annual financial statements that should contain an income statement, the cash flow statement, the balance sheet as well as any other documents attesting other financial activities of the company. The company must also prepare additional documents related to tax returns, once it completed the formalities for VAT registration in Spain and other specific corporate taxes.
Those who want to open a Spanish SL must be aware that the VAT system for certain Spanish regions will follow different regulations in 2021. For instance, companies registered in the Canary Islands, Melilla and Ceuta, which are Spanish regions, are not considered VAT territories under the Spanish law, but they are considered as parts of the European Community. According to the Spanish budget for 2021, these regions will be liable for VAT, but will be not taxed in Spain.
6. Are there other special requirements for a Spanish SL?
The limited liability company in Spain must have a name that mentions its structure, therefore the words “sociedad limitada” are mandatory for company registration in Spain. All companies must be registered with the Trade Register in Spain. At the same time, the company’s trading name can also contain the abbreviation “S.L.” or “S.R.L”.
During the incorporation procedure, the investors will need to draw the company’s articles of association, which will have to be notarized by a public notary in Spain; such documents will then have to be filed with the Commercial Registry in Spain. The registration procedure will also include the following:
•a trading name that has to be unique on the country’s territory;
•opening of a corporate bank account at a local bank in Spain, in which the company’s capital will be deposited;
•apply for a tax identification number, issued by the Tributary Agency;
•once the company willhire employees, it will be necessary to register them with the Social Security authorities;
•it is also compulsory to notify the local authorities once the company started its operations (no later than 30 days since the first day of business activity).
What are the legal grounds for the dissolution of a Spanish SL?
The Spanish legislation prescribes several legal grounds on which a Spanish SL can be dissolved. Most of these situations refer to financial difficulties experienced by the company, but the legal entity may also be terminated in the situation in which its investors consider that the business has reached its goal. Besides this, the Spanish SL can be closed down when the company’s net assets have a total value of less than half of the company’s share capital.
In the situation in which the company has less than half of the company’s share capital, it is compulsory under the Spanish legislation to dissolve the company. However, other types of reasons can also be stipulated under the company’s articles of incorporation and businessmen can receive more information regarding these stipulations from our team of consultants in company registration in Spain.
How long does it take to register a Spanish LS?
The registration procedure of a Spanish SL can last depending on the whether the investors are in the country or not. In the situation in which the investors are present in Spain during the incorporation of the company, the procedure can last approximately five days. If the investors are outside the Spanish territory, they may request legal representation fromour team of specialists in company registration, who can represent them through the power of attorney. In this case, the registration can last up two weeks.
Our team of agents in company formation in Spain can help you incorporate any type of company. Investors are invited tocontact our specialists for in-depth assistance on the registration of a limited liability company in Spain, who may also offer tailored information on the business permits that are necessary when opening a company in this country.
Call us now at +34 915 36 78 06 or +34 938 074 056 to set up an appointment with Federico Richardson, one of our specialists in company formation in Madrid and Barcelona. Alternatively you can incorporate your company without traveling to Spain.
As a Lexidy Law Boutique SLP client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Spain.