The decision to launch your startup comes with the need to set up a company, and with it numerous unknowns arise. One of the first issues to consider is the choice of the appropriate legal form. Although each situation may require a particular solution, as a general rule, the Limited Company (S.L.) stands out as the fastest, most practical and recommended option for small entrepreneurs in Spain.
Define the type of Company to be incorporated
The Limited Company is the most common form of commercial entity in Spain, due to its ability to allow partners to limit their liability to the capital they have contributed, thus avoiding compromising their personal assets in the face of possible company debts. Three of its most notable advantages are highlighted below:
- Number of members: You can have a minimum of one member (sole proprietorship) and there is no maximum limit. In addition, partners can be both individuals and legal entities.
- Responsibility of partners: The liability of the partners is joint and several between them, but it is limited to the capital they have contributed, which means that they are not personally obligated to answer for the company's debts beyond their investment.
- Social capital: The Capital Companies Act establishes a minimum share capital of 3,000 euros. However, it is important to note that it is now possible to create a company with a share capital of as little as 1 euro, although this option has certain disadvantages that must be considered. It is also possible to provide assets such as social capital instead of money.
If you are in this situation and are considering the creation of your startup in Spain as a Limited Company, then we will explain how to do it, either in a traditional way or through telematic means.
Establishment of a limited company by the conventional method
Step 1: Obtaining Negative Certification
Request the reservation of the name to the Central Mercantile Registry (RMC), for which you must provide up to five alternative company names, of which the Central Mercantile Registry will issue the corresponding Negative Certification of Social Name to ensure that the name you want for your company is not already registered by another entity.
Step 2: Opening a bank account and depositing share capital
Open a bank account in the name of the company and deposit the required minimum share capital. The minimum share capital needed to set up a Limited Company (SL) in Spain is 1 euro. You must deposit this amount into the company's bank account. Keep in mind, if you are more than one partner, that each partner must make the contribution corresponding to their% of participation in the company. Once you have done this, ask the bank to issue you the Bank Certificate of Disbursement of Share Capital. Without this, the notary cannot start the procedures or sign the constitution.
Step 3: Preparation of Articles of Association
Write the Company's Articles of Association, which are the internal rules that will govern its operation. In the following link you will find Royal Decree 421/2015, of May 29, which regulates the standard statutory and public deeds models of limited liability companies: https://www.boe.es/eli/es/rd/2015/05/29/421
If you need to make adjustments to it, the ideal is to have the advice of a commercial lawyer. Intelectium can help you in this area. Clique Hither.
Step 4: Signing of the Deed of Constitution at the Notary Office
Make an appointment and meet with a notary, presenting him with the following documentation:
- Social Statutes.
- Negative certification of company name.
- Bank certificate of disbursement to the share capital.
- Identity documents of the founding partners.
- Foreign investment declaration (for foreign partners in certain cases).
The notary will provide you with the writing as an integral part of their services, but if you want to consult the writing model in a standardized format, you can find it here: https://www.boe.es/buscar/pdf/2015/BOE-A-2015-9803-consolidado.pdf
Step 5: Obtaining the provisional NIF
Request the company's provisional Tax Identification Number (NIF) using form 036 from the Tax Agency. This provisional NIF will be valid for 6 months, during which time you must obtain the definitive NIF.
Step 6: Payment of Property Transfer Tax (ITP) fees
Although the transaction is currently exempt, some registrations may require the completed model to constitute a Limited Company.
Step 7: Registration in the Commercial Register
Register the Deed of Constitution in the corresponding Commercial Registry.
Step 8: Obtaining the definitive NIF
Once the Commercial Registry has registered the Deed, you can request the company's definitive NIF.
Step 9: Activity registration
Request the registration of the company's activity through form 036 before the Tax Agency.
Establishment of a limited company using the telematic or “ultrafast” method
Step 1: Choosing a PAE (Entrepreneur Care Point).
There are two types of Entrepreneur Service Points:
- Public PAE: entities linked to the public sector. For example: City Councils, Chambers of Commerce, Development Agencies or non-profit associations related to the care of entrepreneurs.
- Private PAE: members of organizations such as Professional Associations, professional associations and business groups that have signed the collaboration agreement with the DGIPYME.
You can find the most convenient one, depending on your needs, at this link: https://paeelectronico.es/es-es/Servicios/Paginas/BuscadorPAE.aspx
From that point on PAE, the Single Electronic Document (DUE) will be completed and the electronic processing will begin by sending to each intervening agency electronically the part of the DUE that corresponds to it to carry out the procedure within its competence.
Step 2: Obtaining Negative Certification
The reservation of the name to the Central Mercantile Registry (RMC) will be required, as indicated in Step 1 of the conventional method. The RMC will issue a certificate, following the order provided by the applicant, within a maximum period of 6 business hours after the request. In addition, the date of issuance of the constitution will be established immediately through a real-time communication with the notary electronic agenda, where the data will be obtained from the notary office, as well as the date and time of the grant, which will not exceed twelve business hours from the beginning of the online processing process.
Step 3: Opening a bank account and depositing share capital
Open a bank account in the name of the company and deposit the required minimum share capital. The minimum share capital needed to set up a Limited Company (SL) in Spain is 1 euro. You must deposit this amount into the company's bank account. Keep in mind, if you are more than one partner, that each partner must make the contribution corresponding to their% of participation in the company. Once you have done this, ask the bank to issue you the Bank Certificate of Disbursement of Share Capital. Without this, the notary cannot start the procedures or sign the constitution.
Step 4: Signing of the Deed of Constitution at the Notary Office
Make an appointment and meet with a notary, presenting him with the following documentation:
- Social Statutes.
- Negative certification of company name.
- Bank certificate of disbursement to the share capital.
- Identity documents of the founding partners.
- Foreign investment declaration (for foreign partners in certain cases).
Unlike the conventional method, the Notary in question, together with the constituent partners, will authorize the writing of incorporation in electronic format, in a standardized format and with coded fields. Then, the notary will immediately send, through the CIRCE electronic processing system, a copy of it to the Tax Administration, requesting the provisional assignment of a Tax Identification Number and will send an authorized copy of the letter of incorporation to the Commercial Registry of the registered office through the CIRCE electronic processing system. In addition, if requested, it will provide the grantors with a simple “provisional” electronic copy of the writing.
Step 5: Record the Deed in the RMC
Once received by the RMC, through CIRCE, the electronic copy of the constitution, together with the assigned provisional NIF and the accreditation of the exemption from the Tax on Property Transfers and Documented Legal Acts, in its form of Corporate Transactions, it will proceed with the initial qualification and registration within 6 business hours following the electronic receipt of the writing. You will send to the Information Center and Business Creation Network, on the same day of registration, certification of the registration carried out. In addition, you will request the definitive tax identification number from the Tax Administration through the CIRCE. Thereafter, the constitution will be permanently registered in the terms of its grant within 5 days from the date of the filing entry.
Step 6: Assignment of the definitive NIF and registration of the activity
Finally, the Tax Agency will electronically notify the CIRCE electronic processing system of the definitive nature of the Tax Identification Number (NIF), and the latter will immediately transfer it to entrepreneurs. Also, from the chosen PAE, the procedures relating to the start of activity will be carried out by sending the information contained in the DUE to the tax authority, to the General Social Security Treasury, and, where appropriate, to local and regional administrations to carry out the communications, registrations and requests for authorizations and licenses necessary for the start-up of the company.
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