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Startups

& Founders & Law


CONTENTS

COMPANY FORMATION
COMPANY STRUCTURE
LLC
SETTING UP PROCESS
COMPANY BYLAWS
LEGAL DOCUMENTS TO BEAR IN MIND
COMPANY FORMATION

Self employed (Empresario Individual or Autnomo)


Partnership (Sociedad Civil)
Limited Liability Company (Sociedad Limitada/SL or Sociedad de Responsabilidad Limitada / SRL):
is the most common form of company in Spain and is similar to a limited company in other
countries. The advantages of this sort of company structure is that there is a minimum of capital
required and limited liability to the owners.
Public Limited Company (Sociedad Annima / SA)
New Enterprise Limited Company (Sociedad Limitada Nueva Empresa / SLNE)
Co-ownership (Comunidad de Bienes / CB)
SELF-EMPLOYED OR COMPANY?

Differences between the two types of business structure:


Tax Issues
Administration and Costs
Credibility
Liability
LLC

Capital: Start-up capital of 3,000 is required


Responsibility: this is limited to the capital invested by the shareholder(s).
Number of shareholders: Minimum 1- No limit of numbers of shareholders
Investment: Cash and/or non-cash assets, but not investments of working time.
Legal personality: In front of a public notary and entered in the local companies register.
Dividend payments: Retain 10% of earnings until total retained earnings are equal or above 20% of the paid
up capital of the company.
Limit: Post distribution, the book value of the company is not less than the paid up capital total.
SETTING UP PROCCESS I

Registration of the Company Name: Certificate of Uniqueness in Central Commercial Registry. Can be made
online
Open a Bank Account: to deposit the capital. A deposit certificate will then be issued.
Apply for a NIF/ NIE: Tax identification code. This can be done at the Tax Office (Delegacin de Hacienda). A
provisional number will be given straight away, and a permanent CIF number must be obtained within six
months.
Obtain a Public Deed of Incorporation: Done before a notary. Includes:
the names of the company shareholders,
the amount of shares held by each shareholder
the type of administrative body managing the company and identity of the administrators/directors.
the tax identification number of each shareholder
the bank deposit certificate
the Certificate of Uniqueness.
SETTING UP PROCCESS II

Pay Transfer Tax and Stamp Duty: (Impuesto de Transmisiones Patrimoniales y Actos Jurdicos
Documentados) Where?At the local Tax Office of the province in which the company is
incorporated.
Present: The deed of incorporation and the CIF .Cost is 1% of the company capital share.
Register the Company: File the public deed of incorporation with the Central Commercial
Registry.
Registrations costs will vary based on number of shareholders, capital invested, etc.
Period to register: two months of the date the public deed of incorporation was granted.
Submit a Formal Declaration to Start Activity: Local Tax Office (Delegacin de Hacienda).
Register for Tax: Requires a description of the business activity, business starting date and a
description of the business premises.
SETTING UP PROCCESS III

Legalise Company Books: keep accounts books, a minutes book and VAT (IVA) register books.
Where? Must be submitted to the Central Commercial Registry
Obtain an Opening Licence at the Town Hall: Present public deed of incorporation.
Costs depends on the intended business activities
Different requirements based on the area or district in which the business is located.
Notify the Regional Work Authorities Office: Before starting the economic activity.
Time Required: Usually 1 month. Point Consulting Entrepreneur (PAE) 24 hr.
COMPANY BYLAWS

Corporate name
Corporate purpose
Registered office
Managing body : Shareholders meetings //administrative body managing
Duration of the company
The date on which activities commence
Restrictions
Ancillary obligations, if any.
The fiscal year-end
Special rights
LEGAL DOCUMENTS TO BEAR IN MIND

Non Disclosure Agreements


LOIs and MOUs
Commercial Agreements
Attorney Engagement Letter
Founders agreement