The most common type of business organization in Spain is the Sociedad Limitada, or Limited Liability Company (hence, “LLC”). Small and medium-sized corporate owners frequently employ this form of corporation because, among other benefits, it limits their responsibility to the shared capital. It also prevents them from paying with their holdings to the liabilities of their corporation.
This organizational entity is frequently used by foreigners looking to start their businesses in Spain as they view it as the most suitable. This post will describe how to set up your LLC in Spain and what are the registration costs.
About Sociedad Limitada
LLCs must have a basic share capital of Euro 3,000. This needs to be paid in full at registration. The transfer of its shares must be disclosed in a published record. The shares won’t often be freely transferrable. In the case when shares are transmitted to other parties, the law gives priority purchase power in favor of the other owners.
An annual general session is held by the governing board of the corporation. Deliberations on social affairs, recruitment, bylaw amendments, changes to share equity, and company liquidation are the primary purposes of the meetings.
The company’s daily operations and interaction with outside entities are handled by this executive and representational group. All actions falling under the corporate objectives outlined in the bylaws are covered by the representatives.
Formation and registration of LLC
The first step is to propose potential business titles to the Central Company Registrar to make sure no other firm is already established under the same term. You will be given a document with a negative name if there isn’t one. It can take this procedure three to five days. With the help of the aforementioned document, the new investors can create a deposit account in the business’s title and transfer the necessary capital. Investors will receive a statement from the bank attesting that they have invested the necessary equity. The two aforementioned credentials, along with the statutes of the firm, are sufficient to create and sign the certificate of establishment, which must be approved by a Public Registrar.
According to Spanish legislation, an entity may begin doing operations as soon as it is established as long as a Tax Unique identifier has been acquired. However, debts resulting from operations carried out before registration will be individually accountable to the owners.
Tax registration
The tax authorities require new ventures to apply for a tax file number. Additionally, newly formed businesses that want to begin operating in Spain must submit a formal declaration to the regional tax office.
Bank account
Before the company is incorporated, shareholders may create a banking account in its name and invest the necessary share capital. When establishing a Private limited liability business, this is the most typical course of action.
Once the new business has been registered with the Trade Register, a supervisor may also create a checking account on its behalf.
Documents required for registration
You can send all necessary information and the request form to the registration office once you have reserved the name, opened the corporate account, and obtained the tax ID. These records consist of:
- Request application;
- Details of the owner;
- Details of shareholders;
- Business activities;
- Bank statements;
- Tax ID;
- Corporate permits; and
- Invoice of the statutory fee.
Costs of incorporation
Business registration expenses include notarization fees, registration service charges, publishing expenses, and, lawyer’s bills. The share structure, the number of investors, the number of governors, and other criteria, such as whether they are people or corporate persons, may all affect the expenses.
