How to Set up a Limited Company

There are various ways of setting up a company, but the Limited Company is best known. A Limited Company is a capital company with a commercial nature and legal personality, so it must indicate whether it is a Limited Liability Company or a Limited Company. 

This is done with the abbreviations SRL or SL. Both modalities have limited liability; the employer does not have to respond with his assets but with the contributed capital. This share capital must have a minimum of 3,000 euros, which must contribute when the Company is incorporated. 

A fiscal obligation is generated from this moment on the Corporation Tax. As we will see below, among the steps to be taken to register this type of corporation, it will also be necessary to go to the Tax Agency. 

Types of Limited Companies To create a Limited Company, only one partner is needed, without marking a maximum, but only those who are registered in the Partner Registry Book are considered as such. 

This gives them the right to participate in the distribution of the Company’s profits and the assets resulting from the liquidation, to participate in company decisions, and to be elected as administrators. In the case of a sole proprietorship, we find two types: -The Company is constituted by a single partner. 

One comprises 2 or more partners, but all the shares are from a single partner. In both cases, the so-called individual entrepreneur carries out his activity with limited liability towards his creditors. In this case, the public deed to be presented in the Provincial Mercantile Registry must state that the Company’s constitution is of a single partner and the declaration of having produced the situation of a sole proprietorship.

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Must also record loss of sole proprietorship or change of partner must also record loss of sole proprietorship or change of partner. In either of the two cases, will register the registration with the identity of the sole member. The decisions of the sole member will be recorded in the minutes under his signature or that of a representative. They may be executed and formalized by the member himself or the Company’s administrators.

On the other hand, a sole proprietorship must keep the record book of contracts of the SLU with the sole partner. Steps to follow 

Company Name: 

First of all and foremost is to think of the name for the Company. After this simple step, you have to visit the Central Mercantile Registry. A certificate is obtained that proves that there is no other company with the same name as the one intended to be incorporated. The Mercantile Registry, for its part, has a ‘Company Names Exchange’ thanks to which it is possible to consult among a group of 1,500 available company names that can be assigned immediately. 

Submit Inventory Book and Annual Accounts: 

An Inventory Book and Annual Accounts, a Diary (daily record of operations), and a Minutes Book must be presented. The agreements reached by the General and Special Meetings and the other collegiate bodies of the Company are collected. 

Request Tax Identity Number: 

The Tax Agency (AEAT) grants the Company’s tax identity number (NIF) to identify the Company for tax purposes. This number is requested before making any delivery, provision, or acquisition of goods or services, receipt of charges or payment of payments, or hiring labor personnel. 

The request, as mentioned earlier, is formulated during the month following the incorporation of the Company. 

Public Deed: 

Every Limited Company must have a public deed delivered and authenticated before a notary. The process, since 2010, has been much simpler, with less paperwork. Also, it can be done online. 

Today, the process is swift. The notary delivers the deed on the same day that the certification is received in the case of companies that have a share capital of fewer than 30,000 euros and without legal partners. 

The mercantile registrar proceeds to the qualification and registration within three business days, counting from the telematic reception of the deed. 

Society Statutes: 

Lastly, the Company’s bylaws must state its name, corporate purpose, activities, domicile, share capital, share capital, shares into which it is divided, nominal value, and correlative numbering. 

How the Company’s administration is organized, the number of directors, their term of office, and the remuneration system, if they have already defined it, must also be explained. This would be the information that must be passed before a notary by public deed. 

Registration of the Company in the Provincial Mercantile Registry: 

Only the Company’s registration in the Provincial Mercantile Registry will remain voluntary if an individual entrepreneur governs the Limited Company.

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