When you decide to go into business one of the first decisions you need to make is whether to trade as a single self employed trader or whether you want to trade through a company. If you decide the latter then you have two choices, one is to form a CB (Comunidad de Bienes) and the other is an SL. (Sociedad Limitada) Last month we looked at CB and this month we look at an SL. In short an SL is similar to a limited company in the UK. This means that if your business fails your liabilities will be limited to the company and not to all your personal assets.
It is possible for a single person to set up and SL Company and this will be known as an SLU. You may decide to buy an existing SL which is already trading this will negate the time needed to setup from scratch, however it is imperative that if you do buy an existing SL that it is fully checked out to ensure that there are no debts that are associated to it. The process of buying or setting up an SL will need to be done via a Lawyer or a Gestoria as the process can be long and tedious and will need to be Notarised to ensure that all things are legal.
As the process is quite complicated I have listed below a quick reference guide to setting up a new SL Company, these are guide lines only and as I have already stated you will need to consult with a lawyer or a gestoria to ensure that there are no mistakes made.
Quick reference Guide
• Application and Obtaining of the Company Denomination (Name)
• Drawing up and revision of the Company Statutes
• Obtaining the C.I.F. number (Company’s Fiscal Identification Number)
• Opening a bank account and obtaining a certificate from the bank certifying the depositing of the company capital (for the Notary).
• Instructions to the Notary
• Payment of taxes
• Registration of the Company
• Acquiring and Presenting the Shareholder’s Register
• Acquiring and Presenting the Minutes Book
When you setup your SL you will need to register share capital, which is a minimum of 3006.00 Euro´s, although this can be made up of company assets such as plant or machinery and not necessarily all cash. Obviously you will need to set up Bank accounts for the company to trade with and you should take great care when choosing your bank as the services offered can vary between banks, you want to choose a bank that is going to be helpful to you as in the early stages of the company it may be necessary to apply for a bank loan. Unlike in the UK it is unusual in Spain to be able to have an overdraft facility, an important point to bear in mind!! I hope that these 2 articles have given some help to those people setting up new businesses and I sincerely wish everyone whether they are an existing business or a brand new one, all the best luck in the world. In these difficult times it is not easy for any of us in business.