Given the fact that many of our clients have contacted the law office Marin&Pasalodos regarding legal consultations on the procedure of establishing a Limited Liability Company (LLC) on the territory of Spain, we have decided to highlight the main implications of this process, as it would be useful for those interested to start a business in Spain. In addition to this, more and more persons that own businesses in The United Kingdom have contacted us lately, taking into consideration the current political situation of the Brexit, and the consequences that this will have on their commercial operations.The firms are usually set up as a consequence of the agreement of two or more parties, either physical or juridical persons, and most of the ones who want to set up the basis of a firm tend to chose to create a Limited Liability Company, as the benefits are higher and the registration process is easier than for a joint-stock company, for example.
A Limited Liability Company (LLC) in Spain has the following benefits
• 100% Foreign Shareholders: foreigners can own 100% of the shares in a LLC in Spain;
• Limited Liability: shareholders’ liabilities are limited to their company capital investment. What is interesting and useful to take into consideration is that shareholders’ liability is limited to the amount of the capital stock contributed by them. However, in exceptional circumstances, liability may be permitted from shareholders in order to protect the interests of third parties. The Spanish courts have ruled that the doctrine of “piercing the corporate veil” (levantamiento del velo) can apply when acts of misconduct occurred and the LLC is fraudulently protecting shareholders. In such cases, the courts may hold the company and the individual shareholders liable subjecting their assets to judicial seizure.
• One Shareholder: the minimum number of shareholders is one to form a LLC;
• One Administrator: a minimum of one administrator is required to form a LLC which can be the sole shareholder;
• Low Minimum Share Capital: the required minimum share capital is 3,000 Euro;
• Fast Registration: LLC’s can register online for fast registration;
• EU Membership: as a member of the European Union (EU), Spain offers opportunities to engage with other EU members.
Some important aspects of the Registration process that you have to take into consideration before starting the course of the firm’s establishment:
LLC Company Name – The LLC must choose a name which will not resemble any other Spanish legal entity name and register it at the Commercial Registry. Every LLC must include the words “Limited Liability Company” or “Sociedad de Responsabilidad Limitada” or abbreviated as “S.L.” or “S. R. L.” at the end of their company name.
The opening of a bank account of the company, in which the minimum capital of 3.000 euro must be deposited.
The Articles of Incorporation must be signed before a notary and filed with the Commercial Registry (Registro Mercantil Central) which must include the company name, identity of the shareholders, company purpose, and registered address, etc.
After the signing of the constitutive act in front of a notary, the Tax Registration Certificate must be obtained, and the tax for economic activities incomes must be paid.
If you want to find more information about the process of registering a Limited Liability Company on the territory of Spain or you need legal aid in the drafting of the constitutive act or for any of the establishment steps, don’t hesitate to contact the lawyers of the Marin&Pasalodos law office from Barcelona. We are specialized in commercial law, civil law, administrative law and criminal law, and will offer full professional and emotional commitment in order to obtain a satisfactory result for our clients! You can reach us at the phone number (0034) 932006766, or by e-mailing us at [email protected] Thank you for trusting in us!