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Doing business in Spain: Section I -Types of corporations

 

  1. Types of corporations
  1. 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.

  1. 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.

  1. 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.

  1. Worker’s partnerships

In this type of company the share capital of Cooperatives (Cooperativas) and Labour Corporations (Sociedades Laborales) is owned by the workers.

  1. 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.
  1. 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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