Understanding Self-Employment and Civil Societies in Business

Entrepreneurship: The Autonomous Individual

An autonomous individual is a person who engages in economic activity, managed by their own organization and acting in their own name for all operations. This individual is responsible for their business and its outcomes.

Characteristics of an Autonomous Individual

1. Legal and Physical Person

An individual can be a physical person, meaning they exist naturally and possess rights and obligations. Alternatively, they can be a legal person, which also has rights and obligations within the legal framework.

2. Individual Status: Owner vs. Employee

• Individual (Self-Employed): Owns their work and reaps the benefits.
• Individual (Employee): The fruits of their labor are not their property; they receive a salary.

3. Autonomy and Dependence

A self-employed individual maintains autonomy. However, certain limitations define a dependent status:

• Providing most services to a single client.
• Obtaining 75% of profits from a single operating company.
• Not hiring employees.
• Signing a contract with their main customer.

A professional autónomo requires a college degree.

Capacity to Be Autonomous

To be considered autonomous, an individual must be over 18 years old and have the free use of their property. Workers between 16 and 18 may be independent if they do not engage in commercial activities. Children under 16 can become autonomous in the event of parental death, with the support of a mentor. Those over 18 must have the full legal capacity to manage their assets.

Responsibility of the Self-Employed Worker

A self-employed worker is accountable for debts with all their assets, both present and future. When considering marital property regimes, the spouse's estate may be affected in case of community property, but not in case of separation of assets.

Steps to Register as a Freelancer

1. Registration with Tax Authorities (Hacienda)

When commencing economic activity, you must register with the tax authorities using the"declaración censa" (census declaration). Every three months, you must account for VAT and Income Tax. Upon cessation of activity, you must deregister using the same document.

2. Social Security Registration (RETA)

You must register with the Special Regime for Self-Employed Workers (RETA) within 30 days of starting your activity.

Civil Society (Business Partnership)

A civil society is a business where two or more owners agree to undertake an economic activity in their own name. This agreement is formalized in statutes. Partners must be registered as independent workers, not employees. No minimum capital is required to establish a civil society. The procedures include:

1. Requesting a CIF (Company Tax Identification Number).
2. Registering via census declaration.
3. Registering in the RETA with Social Security.
4. The civil society pays Personal Income Tax (PIT).