Spanish Business Entities: Liability, Capital, and Company Types

Defining the Entrepreneur and the Mercantile Society

Case 2: Mercantile Society (Sociedad Mercantil)

A mercantile society involves habitual commercial activity. Note that while standard commercial entities operate with a profit motive, the original text suggests a specific context that may operate without a profit motive (sin ánimo de lucro).

The Entrepreneur (Empresario)

• Individual Entrepreneur (Persona Física): A natural person.
• Collective Entrepreneur (Persona Jurídica): A legal entity established upon registration in the Mercantile Registry (Registro Mercantil) via a public deed (escritura pública) certified by a notary.

The Company (Empresa)

The company is the economic organization that allows the entrepreneur to operate in the commercial market. It represents the visible entity (e.g., a factory, office, or brand like "ZARA") that carries out the economic activity.

The entrepreneur is the titular holder of rights and obligations (e.g., Inditex S.A.), bearing the responsibility (responsabilidad).

Classification of Mercantile Societies

Societies are generally classified based on management structure and liability:

• Personalistic Societies (Personalistas): Management is typically handled by the partners (socios). These are governed by the Code of Commerce.
• Capitalistic Societies (Capitalistas): Management does not necessarily have to be handled by the partners. These are governed by the Capital Companies Act (Ley de Sociedades de Capital).

Key Types of Commercial Companies

1. General Partnership (Sociedad Colectiva)

   A personalistic society characterized by unlimited liability. Partners invest, decide, and share in both losses and profits.

2. Limited Partnership (Sociedad Comanditaria)

   This structure involves two types of partners:

   • Limited Partners (Socios Comanditarios): Only contribute capital (e.g., 30% of the company). Their responsibility is limited, and they generally do not have the right to decision-making.
   • General Partners (Socios Colectivos): Have decision-making power and bear unlimited liability.

   This type is further divided:

   • Simple Limited Partnership (Comanditaria Simple): Typically personalistic, often with a majority of limited partners.
   • Limited Partnership by Shares (Comanditaria por Acciones): Capitalistic, where decision-making is based on the majority of capital held.

3. Joint Stock Company (S.A. - Sociedad Anónima)

   A capitalistic society where the capital is divided into shares (acciones). Liability is limited to the capital represented by the shares. The minimum required capital is 60,000 EUR. Decisions are based on the majority of capital.

4. Limited Liability Company (S.L. - Sociedad Limitada)

   A capitalistic society where the capital is divided into stakes (participaciones). The minimum required capital is 3,000 EUR.

5. Cooperative Society (Sociedad Cooperativa)

   A corporation where each employee typically has one vote, ensuring equal weight in decision-making.

Classification by Size: Small and Medium-Sized Enterprises (SMEs)

A company can be classified by its size, determined by the number of employees and its turnover or income. In 2011, the European Union established parameters for SMEs (Recommendation 2003/361):

• Micro-Enterprises: Have up to 10 employees and a maximum income of 2 million euros.
• Small Enterprises: Have up to 50 employees and a maximum income of 10 million euros.
• Medium-Size Enterprises: Have up to 250 employees and a maximum income of 50 million euros.

Employment Legislation and Worker Protection

Regarding employment legislation, workers are protected by the European Union (EU) employment regulations specific to their country. Employers must direct an employee under a formal contract, and the employee will be compensated for the work performed.