Limited Liability Company Regulations and SLNE Requirements

Unit 7: Limited Liability Societies

The law provides citizens with the ability to form unitary legal entities.

1. General Features

The law governing limited liability companies was established on 23 March 1995. Its salient features include:

• Capital Structure: In an SL, capital is divided into shares, comprising contributions from all partners who are not personally liable for company debts.
• Company Name: The name must contain "Limited Liability Company," "Limited Company," "SRL," or "SL." It cannot be identical to an existing society.
• Commercial Character: Regardless of their object, SLs have a commercial character.
• Minimum Capital: Capital shall not be less than 3,000 euros and must be fully paid from its origin.
• Registered Office: The SL must establish its home where the center of effective administration and management is located, or where its principal place of business operates. Branches may be opened domestically or abroad by the board.
• Constitution: The company must be constituted by public deed and registered in the Commercial Register to acquire legal personality.
• Sole Proprietorship: Since the 1995 reform, legislation allows for the creation of a sole proprietor limited company.

2. New Enterprise Limited Company (SLNE)

On 1 April 2003, a law was approved to partially amend the 1995 SL regulations, introducing the New Enterprise Limited Company (SLNE). This law simplifies business setup procedures and provides technical assistance for small and medium-sized enterprises, which are vital for job creation and the national economy.

Key Features of the SLNE:

• Naming Requirements: The name must indicate "New Enterprise Limited Company" or "SLNE."
• Partnership: Only individuals can be partners, with a maximum of 5 members.
• Capital Limits: Capital must be between 3,012 euros and 120,202 euros.
• Management: Boards may be one-person or multi-member, but cannot take the form of a traditional board of directors.
• Registration: Constitution requires a public document registered in the Commercial Register to gain legal personality.