Business Entities: Choosing the Right Legal Structure

Sole Proprietorship: Key Characteristics

An individual operates in their own name and through a commercial, industrial, or professional enterprise. Key characteristics include:

• The owner must be of legal age.
• Involves total control of the business by the owner.
• The entrepreneur's liability is unlimited.
• No minimum capital is required.
• The owner is the trade name holder.

Private Civil Partnerships

Two or more individuals agree to contribute money, goods, or industry, with the aim of sharing profits. These companies are often based on private agreements between members, where the actions of individual members are not strictly limited by capital contributions. The company name can be any chosen name.

Public Civil Partnerships

Similar to private civil partnerships, but the agreements between partners are public and formalized by a public deed. They must be registered in the Commercial Register.

Commercial Companies: Structure and Types

Formed by several individuals who pool common equity funds to collaborate in operating a business, with the aim of benefiting from their participation in profit distribution. Commercial companies are generally classified into two main types:

Individualistic Societies

Management corresponds to the most important partners, emphasizing personal aspects over capital contributions.

Capitalistic Societies

The most important aspect is the capital contribution, rather than the personal characteristics of the partners.

Limited Liability Companies (LLC)

Nature:

• A minimum number of members is required; if only one, it's called a single-member LLC.
• The liability of partners is limited to their contributed capital.
• Capital is divided into shares and must not be less than €3,005.06 at the time of constitution, fully subscribed and paid up.
• The company name must be followed by SL or SRL.
• For share transfers, partners must communicate their intention to transfer to the administrators.
• These companies are subject to corporate income tax.

LLC Constitution Requirements

The public deed must be registered in the Commercial Register. The constitution must include the company's bylaws (statutes), which must contain:

• Name of the company
• Purpose
• Registered address
• Share capital
• Administrative organization
• Other relevant covenants and conditions

LLC Governing Bodies

• General Meeting of Partners: The deliberative and decision-making body.
• Administrators: The executive body responsible for company management.

New Enterprise Limited Company (SLNE)

This specific type of limited company has distinct features:

• Maximum of 5 partners, who must be individuals.
• The number of partners can increase through share transfers, though exceeding the initial limit might require a change in company type.
• The minimum share capital, which must be fully paid in cash at the time of constitution, is €3,012, with a maximum of €120,202.
• The company name must include the surname and name of one partner, followed by a unique alphanumeric code.