If you have in mind starting a new business venture, or want to launch an idea with altruistic aims, the next step is to make it a reality. In other words, it is time to decide which legal form or company type will best suit the needs and objectives your activity demands.
At BBMabogados we are specialists in company formation, so do not hesitate to contact us for advice on the best way to legally establish your project.
What are companies and why form one?
Firstly, we should set out a basic notion of a company. This is an organisation with its own legal personality, through which acts or operations of trade are carried out from which a profit will be obtained, to be distributed among the partners.
It is important to distinguish that civil partnerships meet all the above characteristics, with the exception of profit. Their primary purpose is to contribute to achieving a common interest for the group.
Types of companies
It is of great importance to be familiar with the most significant types of companies. This is in order to choose the one that best suits the project to be carried out.
PUBLIC LIMITED COMPANY (SOCIEDAD ANÓNIMA)
Its main particularity comes from the division of its capital into parts called shares, which can be transferred with complete freedom. In turn, a minimum capital of 60,000 euros is required for its formation. Likewise, at the time of formalising the public deed at least 25% of that amount must have been paid up. Despite its corporate spirit, it can be formed with a single person.
The liability of the partners is limited to the capital they have contributed. An obvious disadvantage is the one that comes with the free transferability of the shares, since there can be no control over the persons who will come to form part of the company.
PRIVATE LIMITED COMPANY (SOCIEDAD LIMITADA)
This type of commercial company is very similar to public limited companies in terms of the structure and limited liability of the partners. As with the fact that its capital is divided into holdings. However, those holdings are of equal value and their transferability is fairly heavily regulated. Since the entry into force of Law 18/2022 (Crea y Crece), a private limited company can be formed with a share capital of just 1 euro, which must be fully paid up. As long as the capital does not reach 3,000 euros, two safeguard rules apply: at least 20% of the profit must be allocated to the legal reserve until that figure is reached, and the partners are jointly and severally liable for the difference up to 3,000 euros in the event of liquidation.
As with public limited companies, only one partner is required for its formation. Among its advantages we find limited liability; on the other hand, the procedures for its formation are simpler. Likewise, it should be highlighted that its tax obligations are lower.
COOPERATIVE COMPANY
For this type of company a minimum of three members is required, who come together to engage in a common economic activity. Their liability is limited as in the previous cases and each one will hold at most one third of the capital. On this particular point, the statutes will reflect the company’s capital, since there is no minimum limit on the contribution.
PROFESSIONAL COMPANY
These are intended to provide professional services through an entity with its own legal personality. For this reason, those who make it up must hold the official professional accreditation and be registered with the relevant professional body. This includes, for example, doctors, lawyers or engineers.
In their company name they must specify that it is a professional company. It is compulsory to register them at the Commercial Registry and in the professional register of their activity. For its part, it should be borne in mind that the company will be liable with all its assets; nevertheless, the professional will only be jointly and severally liable for the debts arising from their own conduct.
CORPORATIONS
Corporations are simply separate estates whose owner is a legal person. They are made up of assets, credits and debts.
FOUNDATIONS
Foundations have as their main feature that their purpose is non-profit. Likewise, their basis is an estate and they are not made up of partners. That is, their aim is to serve the pursuit of a common interest.
It is worth noting that this is an organisation supervised by the administration created in its statutes, which may request that accounts be rendered to it regarding the budget.
ASSOCIATIONS
This is another non-profit entity which, unlike foundations, does have a personal element. That is, a minimum of three people group together to achieve a common aim. The steps for its formation begin with the drafting of its statutes and founding minutes. Subsequently, the association will be registered at the National Register of Associations; the next step will be to apply for the provisional tax ID (CIF), and then to open a bank account in the association’s name.
Finally, we will move on to the registration of the trademark and of the database it holds, in the corresponding file to comply with the Data Protection Act.
Other types of companies that can be formed in Santander
The above are not the only company forms available to you in Santander. We find others such as:
GENERAL PARTNERSHIP (SOCIEDAD COLECTIVA)
In this form, the partners, in addition to their capital, contribute their work and are responsible for managing the company. This feature does not allow the free transfer of partner status. Thus, the liability of the partners is not limited to the capital, as they are personally liable for the commitments undertaken in the company’s name.
LIMITED PARTNERSHIP (SOCIEDAD COMANDITARIA)
Similar to the previous one, in this type there is the possibility that some partners are not responsible for its management. In this way, the general partners (those who manage the company) are liable without limit; whereas the limited partners (those who do not manage it) are liable only up to the capital they have contributed.
LAWYERS WHO EMPATHISE WITH THEIR CLIENTS IN DIFFICULT MOMENTS
We protect our clients’ rights with the utmost dedication and diligence, placing special emphasis on personal attention.
