Setting up a Limited Liability Company (Sociedad Limitada) in Spain

Setting up a Limited Liability Company in Spain or a Sociedad Limitada (SL) is the best choice for those who are looking for flexibility, since the shareholders can define their own internal rules. Besides, it is ideal for small or medium-sized businesses. A legal advisor is usually recommended in the process of setting up a SL in Spain.

Capital

A minimum capital of 3,000 EUR is necessary to be paid up before the incorporation of a Limited Liability Company in Spain. Contributions may consist not only of cash, but also of credit rights, real property or other assets, which do not need to be evaluated by an expert. The capital is divided in shares (participaciones), which cannot be listed at the Stock Exchange. Moreover, shares are indivisible and cannot be freely transferred.

Shareholders

Only one founder is needed for setting up a Limited Liability Company in Spain and there is no limit in the number of shareholders. Partners are liable only up to their investment in the company. 

Management

The Board of Directors can consist of three to twelve directors and one director can be elected for an indefinite period. The general meeting of the shareholders is the ultimate managing body and has authority to appoint and remove the directors of the Spanish Limited Liability Company. The executive management body of the company is made up of one or more directors, who are not necessarily shareholders. There is also no restriction in terms of nationality or residence.

Control

It is not necessary to obtain an expert’s report for non-cash contributions when setting up a limited Liability Company in Spain. However, any change that is intended to be made upon the documents of incorporation must be approved at a shareholders’ General Meeting. There is no requirement under the Spanish legislation to keep any accounting documentation, as long as they can be made available at the request of the Spanish authorities. However, financial statements have to be made every year.

Other requirements

The name of the company has to contain the words “Sociedad Limitada” when registering with the Spanish authorities. The deed of incorporation has to be signed before a notary and then registered at the Corporate Registry in France.