- The most common types of commercial companies in Spain
- Complete list of varieties of legal forms in Spain
- Types of management bodies in limited liability companies
If you are interested in the title of this article, we can assume that you have decided to register a business in Spain.
The choice of the type of commercial company depends on many factors, such as the size of the business, number of employees, tax liabilities, etc.
The most common types of commercial companies in Spain
Private entrepreneur (Autonomo) - the easiest way to start a business in Spain, in which you are the sole owner. The company, in this case, is subject to individual income tax (IRPF) and will need to be registered in the national registry of taxpayers (Censo de Empresarios).
Partnership (Comunidad de Bienes) - is a business structure in which two or more persons jointly own a business and share profits and losses. Each partner is personally responsible for a share of the business.
OOO (Limited Liability Company или SL) – is the most common type of business in Spain, where owners have limited liability for their share in the company. In addition, they are subject to corporate income tax (Impuesto sobre Sociedades).
Joint Stock Company (Sociedad Anónima or SA) - The type of company that can sell shares on the stock exchange. This type of company is usually used for large companies.
Full list of legal forms in Spain
Each of these types of companies has its advantages and disadvantages, and choosing the most appropriate one depends on the specific task and business needs.
In this article we will talk about Limited Liability Companies (Sociedad de Responsabilidad Limitada), enterprises in which the liability of each of its partners is limited to the capital he has contributed.
Types of management bodies in limited liability companies
In Spain, there are several types of governing bodies in limited liability companies:
Sole Administrator. Responsible for the general management of the company and its legal obligations. This can be a legal or natural person appointed in accordance with the company's articles of association. The sole administrator may not delegate his or her position to a third party.
Several equal directors. In this case, the power of representation belongs to each of them. They may act separately, without the need for the other, and may independently take any action with respect to the company.
Two or more joint administrators. The power of representation shall be exercised jointly by at least two of them in the manner prescribed by the Charter.
Board of Directors. It is a collegial body in which the consent of a majority of its members is required for any action to be taken. In the case of limited liability companies, the Board of Directors must consist of a minimum of three and a maximum of twelve members, who are responsible for making strategic decisions of the company. As in all collegial bodies, a quorum of attendance and a majority vote is required to make decisions. In order for the board to be considered truly constituted, half plus one of its members must be present or represented at the meeting. Decisions are made by an absolute majority of the directors.
It is also important to keep in mind that there are certain positions that need to be assigned to the Board that will have different functions:
- Chair (or vice-chair): responsible for convening and setting the agenda, as well as chairing and coordinating meetings
- Members of the board: serve as the administrative body with the chairperson and are responsible, along with him, for the work of the board
- Secretary of the board: responsible for the correctness of procedures and compliance with established rules
David Sherozia, CEO of Laduchi Consult:
“We constantly transfer our accumulated experience to our company as well - we use it to improve our own internal processes and operating principles. This allows us to increase the efficiency and productivity of individual team members and of the company as a whole. For this purpose Laduchi Consult has created a Board of Directors.
As part of this type of management every three months we convene a special Supervisory Board, which consists of experts from our priority industries. In conditions of a dynamically changing world the outside view is very relevant, it helps to set the right priorities and map out the vector of development. Having introduced such a tool in his company, a business owner receives an expert assessment in all areas of activity, from developing a strategy and set goals, to controlling the company's financial results and marketing activity.”
Another type of governing body of Limited Liability Companies in Spain is the General Meeting of Shareholders (Junta General de Socios). This is the highest governing body of a limited liability company. It is composed of all shareholders who have the right to vote and can decide on important issues such as changing the articles of association, appointing and dismissing directors, deciding on the payment of dividends, etc.
In general, the governing body and the general meeting of shareholders form a unified system that ensures the effective management and control of the limited liability company.
Choosing the right governance model can be a complex and time-consuming task, especially in a new country. It is necessary to consider not only the specific needs and characteristics of the organization, but also the goals and tasks that the governing body has to fulfill. With many years of experience and knowledge of the intricacies of European legislation, the experts at Laduchi Consult help you choose the right type, taking into account the legal and financial aspects, risks and opportunities for the business in the future.
Please note that all materials contained on this site have been prepared for informational purposes only. This data does not constitute or replace professional financial, legal or tax advice. The information is general in nature and does not take into account your personal circumstances. Always seek professional advice from officially licensed professionals: financial advisors, accountants and lawyers.