One of the benefits of an SL company is that only the assets of the company are liable. It is not possible to execute debt against the personal capital of the shareholders.
To set up a limited liability (SL) company the followings steps are necessary:
1 You must first issue a communication to the Registro Mercantil Central (Central Companies House) in Madrid, containing the name of your would-be company. If the name applied for has not already been registered, the Registro Mercantil Central will issue you a certificate allowing you to trade under that name for 18 months.
2 One of the crucial attributions of this certificate is that it entitles you to open a bank account under the name of the company that is going to be created. Under Spanish Company Law, a deposit of 3,100 euros must be put down. The bank will issue a certificate, signed and stamped by the bank manager.
3 It is now necessary to prepare the statute of the company. This is the most technical element regarding the setting up of an SL company and requires the aid of a lawyer. Firstly, the statute must include the official address (so you can receive all official documents like tax bills) and the administration system of the company.
There are three administration system options: unique administrator (only one person can officially represent the company), solidarity administrator (two or more represent the company) and detached administrator (individual administrators represent the company in certain pre-arranged matters).
All these particulars must be agreed by the shareholders and established clearly under the statutes of the company.
4 With these three crucial elements done, it is necessary to go to the notary and prepare the public deeds of the new SL company (Escrituras Públicas de constitución de una sociedad de responsabilidad limitada)
The notary will analyze the documentation. Once acceptable, they will prepare the public deeds for the company. The deeds will be read in the presence of the notary and signed by both the notary and the shareholders of the company.
5 Once the documents are collected from the notary, it is necessary to clear the taxes on the company. The tax on these particulars is called Impuesto de Transmisiones Patrimoniales Operaciones societarias.
For the payment of these taxes it is necessary to use a Modelo 600 document. Provided by the tax office, this intends to simplify the tax payment process.
The taxes paid on the setting up of a limited liability company will be 1 per cent of the social capital of the company. So, if the company has a social capital of 3,200 euros the tax will be 32 euros. This document for the tax payments will have to be signed by the administrator of the company. Only once the taxes are paid, is it possible to submit the public deeds to Companies House.
6 The public deeds on the constitution of a limited liability company must be accepted by the Companies House (Registro Mercantil) of the province in which the company is officially registered (usually the capital of the province). There must be at least one Companies House per province, and one of its attributions is to oversee and keep a record of the public deeds of an SL company. The public deeds must be correct in accordance with Spanish Company Law or they will not be accepted.
If the public deeds are not correctly completed, the documents will be returned to the shareholders of the company and they will have to be amended. In this scenario, it is then necessary to submit both the original public deeds and the amended version to Companies House.
7 Once the company is accepted by the Registro Mercantil, it will have all the guarantees the Spanish Legal system provides for SL companies. On this basis, every citizen is entitled to go to the Registro Mercantil in which the company was registered and ask to see the company’s nota simple. Included in this document, for example, is the SL company’s latest tax returns.
Furthermore, once the SL company is registered with Companies House it is not possible for anybody else to create a limited liability company with the same name. Spanish law does not allow for two or more companies with the same name trade at the same time in the national market.
These are just some guidelines regarding these aspects. However, it is advisable to seek the help of a lawyer when setting up an SL company.
For a professional, fully confidential legal service in English and Spanish contact Jose Maria Ruiz Castillo on 618 31 40 62. Alternatively, visit his offices in Granada on Camino de Ronda, 78. Email: [email protected]