Business Structures in Spain: A Detailed Comparison

Sole Trader

Sole Trader:

• Partners: 1 person
• Minimum Capital: None
• Liability: Unlimited
• Tax: Personal Income Tax (PIT)
• Submitted to the Commercial Code in commercial matters and the Civil Code concerning rights and obligations. The legal personality of the company is the same as that of its owner.

Community of Property

Community of Property:

• Partners: Minimum 2 partners
• Minimum Capital: None
• Liability: Unlimited
• Tax: PIT
• A thing or right belongs to a few people or co-owners.

Civil Society

Civil Society:

• Partners: Minimum 2 partners
• Minimum Capital: None
• Liability: Unlimited
• Tax: PIT

Partnership

Partnership:

• Partners: Minimum 2 partners
• Minimum Capital: None
• Liability: Unlimited
• Tax: Corporate Income Tax (IS)
• Traditional corporation. The general or capitalist partners have unlimited joint and several liability for the debts of the company, while the industrial partners do not. Public deed at the Registry.

Limited Liability Company

Limited Liability Company (S.L.):

• Partners: At least 1 partner
• Minimum Capital: 3005.06 Euros
• Liability: Limited
• Tax: IS
• Designed for SMEs. Capital is divided into shares. Devoted to trade. 1 single partner: one-person limited company.

New Company Limited

New Company Limited (S.L.N.E.):

• Partners: Maximum 5 members
• Minimum Capital: 3012 Euros, maximum 120202 Euros
• Liability: Limited
• Tax: IS
• The object is generic.

Corporation

Corporation (S.A.):

• Partners: At least 1 partner
• Minimum Capital: 60101.21 Euros
• Liability: Limited
• Tax: IS
• The best option for the development and growth of a company. Can raise capital and have unlimited partners. Share capital of free transmission. Public deed at the Registry.
• Shares: ordinary and privileged.
• There are two major powers in corporations:

• Board of Shareholders: Meets within six months of each year. The number of votes of each shareholder depends on the number of shares held.
• Board of Directors: Is elected at the shareholders' meeting. Takes most of the decisions of the society. Shareholders may change the board members if they are dissatisfied with them.

Partnership Limited by Shares

Partnership Limited by Shares:

• Partners: At least 2 partners
• Minimum Capital: 60101.21 Euros
• Liability: General partners: unlimited, limited partners: limited
• Tax: IS
• Capital is divided into shares. At least one equity partner is jointly and severally liable for the debts.

Limited Partnership

Limited Partnership:

• Partners: Minimum 2 partners
• Minimum Capital: None
• Liability: General partners: unlimited, limited partners: limited
• Tax: IS

Labor Company

Labor Company (S.A.L. or S.L.L.):

• Partners: At least 3 members
• Minimum Capital: 60101.21 Euros (S.A.L.), 3005.06 Euros (S.L.L.)
• Liability: Limited
• Tax: IS

Cooperative Society

Cooperative Society:

• Partners: Minimum 3 partners
• Minimum Capital: Defined in the statutes
• Liability: Limited
• Tax: IS (special)
• There are two types:
  • Grade 1: 3 partners or more
  • Grade 2: Two or more cooperatives (cooperative of cooperatives)

Mutual Guarantee Societies

Mutual Guarantee Societies:

• Partners: At least 150 members
• Minimum Capital: 1803036 Euros
• Liability: Limited
• Tax: IS

Temporary Business Union

Temporary Business Union (UTE):

• Without legal personality.
• The association is limited to the development or execution of a work, service, or supply.
• The liability is joint and unlimited for participants.
• A manager acts on behalf of the consortium.

Franchises

Franchises:

• A mode of distribution and marketing through which the franchisor grants a person or entity (franchisee) the right to operate a business concept, marketing a product or providing a service under the franchisor's business format and under its own brand.
• Highlighted in the service sector.