Limited vs. Public Limited Company Structures

Sociedad Limitada (SL): Limited Company Structure

SL Constitution Requirements

The statutes for a Sociedad Limitada (SL) must contain at least the following:

• Name of the Society: The official designation of the company.
• Purpose: A clear indication of the company's activities.
• Registered Office: The official address of the company.
• Share Capital: Details on how the capital is divided into shares, their nominal value, and their correlative numbering.
• Administration Organization: How the administration will be organized, under the terms established by law.
• Other Clauses: Any other special agreements that members deem fit to establish.

SL Corporate Bodies

The management and administration of the society are the responsibility of its corporate bodies. These typically consist of the General Meeting (JG) and the administrators.

The General Meeting (JG)

The JG is a deliberative body empowered to make key decisions. Matters typically addressed by the General Meeting include:

• Analysis of company management.
• Approval of annual accounts and the allocation of the year's profits or losses.
• Appointment and dismissal of administrators.
• Modification of the company's statutes.

All partners, including those who have not attended, are subject to the agreements made by the General Meeting.

SL Administrators

The administration can be entrusted to a single person or a Board of Directors. The requirements for administrators are:

• They cannot engage in the same kind of trade or business as the society, thereby avoiding conflicts of interest.
• They will serve for the period indicated in the company's statutes and can be removed at any time by the General Meeting.
• To prepare the annual accounts, they must follow the rules established for a Sociedad Anónima (SA).
• They do not necessarily need to be partners in the company.

Sociedad Anónima (SA): Public Limited Company Structure

SA Constitution Requirements

The constitution of a Sociedad Anónima (SA) follows similar requirements to an SL, but with additional specifications:

• Share Details: The number of shares into which the capital is divided, including their par value, class, and series.
• Share Capital Specification: A detailed specification of the share capital, including, if applicable, the portion of its value not yet paid up and the manner and timeframe for its payment.

SA Corporate Bodies

A Sociedad Anónima typically has two main corporate bodies: the General Meeting (JG) of shareholders and the administrators.

The General Meeting (JG) of Shareholders

The JG is the shareholders' meeting where decisions on important company issues are taken by an absolute majority of votes present or represented.

There are three primary types of General Meetings:

• Ordinary General Meeting:
  • Meets within the first six months of each year.
  • Purpose: To analyze corporate management, approve the previous year's accounts, and decide on the application of results.
  • Must be convened by the administration.
• Extraordinary General Meeting:
  • Addresses all other matters not specifically reserved for the Ordinary General Meeting.
  • There can be any number of these meetings per year.
  • Must also be convened by the administration.
• Universal General Meeting:
  • Validly convened and constituted to deal with any issue.
  • Requires that all capital is represented.
  • All attendees must unanimously accept its constitution and agenda.

SA Administrators

The role and requirements for SA administrators are largely similar to those in an SL. However, decisions are typically taken by an absolute majority. The General Meeting (JG) is the body responsible for appointing administrators.