Comparison of Spanish SL and SA Corporate Forms

Comparison Between a SL and a SA

Basically, the main differences between these corporate forms are related to (a) equity required, (b) equity transferability, and (c) formalities.

1. Equity Required

• Sociedad Anónima: Minimum share capital is 60,000.00 Euros, and at least 25% shall be paid-up upon incorporation. The shares can be subscribed along a term set out by the incorporating-shareholders.
• Sociedad Limitada: Minimum capital, divided into participaciones, is 3,000.00 Euros, which must be fully subscribed and paid-up upon incorporation. Participaciones of an SL may have disproportionate voting and economic rights. It is admissible that one participación has a plurality of votes.

2. Equity Transferability

• Sociedad Anónima: The equity is essentially transferable unless the Bylaws provide otherwise. All articles that could make the transfer practically impossible will be considered void. Shares (Acciones) of an S.A. may be listed in a Stock Exchange Market (Sociedad Cotizada).
• Sociedad Limitada: Although it basically rules, as well, the principle of “free transfer,” if Bylaws do not provide otherwise, the transfer of equity would require prior authorization from the company. In this case, the sociedad limitada could only oppose the transfer if it provides a third party who acquires the capital in the same (or better) terms that the proposed company Bylaws can also set up a term of up to five years, for which the shares are not transferable. Participaciones of an SL may not be listed on the Stock Exchange. Finally, SLs are prohibited from providing financial assistance to third parties to facilitate purchasing shares in any company of their group of companies.

3. Formalities

The Sociedad Limitada is exempt from the following main requirements that do apply to Sociedad Anónima:

• Publication of the incorporation in the Commercial Register Official Bulletin.
• An independent expert’s report in the event of contributions in kind and the filing of such report at the Commercial Register.
• The approval by the partners of any acquisitions of assets for consideration within two years following incorporation.
• Report of the directors on any proposed capital increases and publication of the capital increase(s) in the Commercial Register Official Bulletin.

With minor qualifications, common requirements and rules to both forms of company, however, relate to:

• Management
• The annual report and accounts
• The consolidation, audit, and filing of the accounts at the Commercial Register
• The merger, division, and dissolution and liquidation of the company.

Additional common points:

• The change of the governing body will not entail the amendment of the Bylaws.
• The term of office for directors is indefinite unless Bylaws envisage a specific term.
• An independent expert’s report is not required for contributions in kind to the company.