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You have to take into account several aspects when you’re going to start a business, among them, the type of company that your business is going to belong to.

In Spain, there are several types of companies, depending on what they are:

1. Non-mercantile society (with physical personality)

  • Individual entrepreneur
  • Community of goods
  • Civil society

2. Special mercantile societies:

  • Labour society
  • Cooperative society
  • Economic interest group
  • Investment trust companies

3. Mercantile Societies are divided into:

  • Partnerships (Business partnership and limited partnership)
  • Capitalist, which are the ones we develop down below because they are the common ones

Private Limited Society or Limited Liability Company

It is the most common type of society in Spain, in special by the small and medium-sized enterprises because the responsibility is limited to the invested capital, so it has not to answer for the debts of the business with the personal heritage of the members.

The minimum capital to invest is 3.000€, in capital or in kind, always being the amount agreed among members. The minimum of members is one (in that case it would be formed a Sole Proprietor Limited Company)

In relation to tax obligations, the Company is obliged to pay the corporate taxes and VAT.

Public Limited Company

This type of company has the same features as the Private Limited Society in relation to responsibility, number of members and tax obligations.

The differences are, from one part, the minimum capital to invest: in this case are 60.000€. From the other part, the management of the company is also different: this kind of society is thought to smaller businesses, in which the partition is among a few members, while in the public limited society the members can sell their shares freely. Finally, in relation to the constitution of the company, the public limited society is stricter than the private one.

New Business Limited Company

The New Business Limited Company is a type of company very similar to the private limited society. But there are some different features: it has a maximum of 5 members, and they must be natural people not legal ones (as in the case of private limited company); the administrator must be a member imperatively; this type of company is more flexible regarding the activities the company develops, because it doesn’t require the change of the statutes in case they are different.

In this case, the minimum capital is also 3.000€ but there is also a maximum capital of 120.000€.

The election of the type of company is very important when you start a business, because of the existing differences among them.  That’s why you must count on a consulting service to choose the option better adapts to your needs.

“Is there anyone so wise as to learn by the experience of others?” Voltaire

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