Understanding Limited Liability Companies and Corporations

Limited Liability Company (LLC)

Features

An LLC may be formed by one or more partners.

The social capital cannot be less than €3,005 and must be fully paid at the time of constitution.

• Liability: The liability of the members is limited to their contributions of money, property, or rights.
• Name: The company name ends with SL.

Government Bodies

• The General Board: This is the governing body of the LLC and is represented by all partners. Its function is to monitor management and approve the annual accounts, as well as appoint directors.
• Administrators: These may be partners or not and are responsible for managing the company and executing the decisions of the general meeting.

The rights of partners involve the sharing of profits and assets of the company.

Advantages and Disadvantages

• Advantage: Members are not personally liable for the company's debts beyond their contributions.
• Disadvantage: Restrictions may exist on the transfer of shares to outside parties.

Corporation (SA)

Features

Corporations are capitalist societies financed through contributions in money, according to their shareholding.

• Minimum Capital: €60,101.21
• Members: The company may be constituted with one or more members.
• Liability: Members can only lose the money invested; their personal wealth is not at risk.
• Name: The company name ends with SA.

Government Bodies

• The General Meeting of Shareholders: Shareholders participate in deciding on major issues of the company, elect directors, and approve annual accounts. Agreements are made by a majority of votes.

Types of General Meetings:

• Ordinary General Meeting: Assesses the management of directors and decides on the distribution of benefits.
• Extraordinary General Meeting: Deals with urgent matters.
• Universal Joint Meeting: Occurs when all shareholders agree to the meeting and the topics to be addressed.

• The Board of Trustees: This is the management authority and representation of the corporation.

Benefits and Drawbacks

• Benefits: The facility to sell shares, the SA favors the separation between ownership and management, which allows hiring managers and facilitates continuity of the company.
• Drawbacks: Separation between ownership and management may lead to conflicts.