Before you make your decision about setting up a business in Spain you should be aware of the following:
To begin a business as an individual businessman or a self employed person
The self employed businessman must be an adult and be legally able (he must not be legally or judicially incapacitated).
He must create a commercial, industrial or professional activity in his own name.
He is the owner of the company and as such he directs and administers it, he has unlimited responsibility with his possessions for any debts that he may have with any third party.
The fiscal obligations are less than in the other kinds of companies, as are the costs for maintenance, due to the fact that it is not necessary to have a minimum amount of capital to start the company, nor are there Notary nor Commercial Registry costs.
Equally our fees are reduced as the administrative process is also less.
The quotas for the Social Security are the same whether the administrator is of a limited liability company or a public limited company. It is not possible to claim unemployment benefit and only in the case of having previously applied for it, will there be the right to claim for sickness pay, something that will have to be approved by the Treasurer of Social Security.
What you do have is the right to public health care and to an old age pension, as long as you comply with the requisites with regard to the contributions.
Immediate family members of the contributor will also have the right to health care, as long as the established conditions are adhered to regarding current legislation.
The similarities and differences between limited liability companies and public limited companies
Both must have deeds signed in front of a Public Notary and must be inscribed in the Commercial Registry.
They have their own legal capacity.
They are commercial entities regardless of the nature of the business.
The responsibility of the partners is limited to the amount of capital that they contributed to the company.
They can be constituted with just one partner.
Work or services to the company by the partners cannot be included as contributions to the company.
The money contributed as social capital can be used to pay creditors.
The bank account in which the money for the constitution of the company has been deposited will be blocked until the corresponding CIF number has been obtained and the inscription of the company in the Commercial Registry has been completed.
For Public Limited Companies it is obligatory for the name of the company to contain the words “Sociedad Anónima” or the abbreviation “S.A.”
In Limited Liability Companies the name must contain “Sociedad Limitada”, “Sociedad de Responsabilidad Limitada” or “S.L”.
The social capital in Public limited companies must equal or be superior to 60,101.21 €.
The social capital for Limited Liability Companies cannot be inferior to 3,005.06 €.
Public Limited Companies must have audited accounts and the accounting system is more complex to that of limited companies.
Public Limited Companies cannot operate on the stock exchange.
Information and documentation that must be presented:
- Original and copy of a valid passport, N.I.E (foreigner’s identification number) in the case of foreigners, and D.N.I. / N.I.F. for those persons who are of Spanish nationality, plus other personal details that are not included in the anterior documentation, for example address and marital status.
- Certificate of Social Denomination issued by the Central Commercial Registry.
- If the contribution of social capital is in cash, a certificate from the bank showing the inversion of the money and its origin, the deposit must be made into a current account in the name of the company, the minimum being 3.005,06 €, for a limited liability company and 60.101,21 € for a public limited company.
If you will not be present for the constitution of the company, you should sign a special power of attorney for the signing of this type of document and if necessary open a bank account in the company name so that you can transfer funds from abroad.
The social Statutes must contain:
- The name of the company.
- Object and activity of the company.
- Commencing date of the activity.
- Business address
- Designation of the administration agency and the powers of the same.