The Limited Company has been the most common type of company in Spain for decades because entrepreneurs are not personally liable for the company’s debts with their own assets; liability is limited to the capital contributed.

It is a form in accordance with the usual requirements of an SME and the capital needs are lower than those of the public limited company. It is characterized because the liability of the partners is limited and because the share capital is divided into shares.

Characteristics of the Limited Company

The regulations governing limited companies define their characteristics, the most relevant being:

• Number of shareholders: minimum of one, with no maximum limit. In the case of a single shareholder, a single-member limited company is created. They may be individuals or legal entities.
• Liability of the partners: joint and several among them and limited to the capital contributed, so that the partners do not respond to debts with their personal assets.
• Type of partners: they can be working partners and/or capitalist partners.
• Name or Company Name: it must be a name that no one has registered before (for which the pertinent query will have to be carried out in the Registro Mercantil Central (Central Commercial Registry) followed by the abbreviation SRL or SL.
• Share capital: the legal minimum is €3,000 fully paid up, with no maximum limit. It can be made up of monetary contributions (money) or in kind.
• Division of share capital: into shares, the transfer of which is subject to certain legal limitations, with the other shareholders always having the right of first refusal against third parties.
• Registered Office: it is normal for this to be the address where the company is located, and it must be in Spain.
• Corporate Purpose: this is the activity or activities to which the company is going to devote itself.
• Incorporation: through statutes and public deeds signed before a notary and subsequently presented to the Commercial Registry.

Other considerations

• Administrative and management body:  there are several options, and one must be chosen in the statutes: Sole administrator (one person), Joint administrators (each one can act on their own and that commits everyone), Joint administrators (they must act jointly, signing always, which limits and slows down the power of representation) or Board of Directors (three or more administrators).
• Management responsibility:  falls on the administrators, not on the shareholders.
• General Meeting of Shareholders: it is the highest body for deliberation and decision-making body.
• Tax obligations: a limited company is obliged to pay corporate tax and VAT.
• Social Security Regime: self-employed regime for administrators and partners who have control of the limited company. The rest, in general regime.
• Legislation:  Limited companies are regulated by  Royal Legislative Decree  1/2010, of July 2, which approves the consolidated text of the  Capital Companies Law, which replaces Law 2/1995, of March 23 of Limited Liability Companies.

Form of Limited Company Statutes

This form of statutes for a Limited Company  (LC), available in Word format, will allow you to prepare the necessary statutes to establish the company. These statutes will govern its operation.

This is a complete form of statutes of a limited company that includes all the necessary sections: corporate purpose, duration of the Company, registered office, share capital, corporate bodies, Board, administrative body, adoption of agreements, corporate year, and dissolution.