Are you planning to open a branch in Spain? Choosing the right legal form for your company is a crucial decision that will affect aspects such as liability, capital, management, and taxation.
From sole proprietorships to temporary joint ventures, each legal form has its own characteristics, advantages, and disadvantages. In this article, we will explore eight types of companies in Spain and analyze their particularities, providing specific examples to help you better understand which one best suits the needs of your project.
The 8 Most Common Types of Companies in Spain
1. Sole Trader (Empresario Individual): An alternative for independent entrepreneurs
For those who prefer to operate independently and assume full responsibility for their business, the sole proprietorship is a viable option. Whether you are a freelance graphic designer or a self-employed plumber, this type of business allows for direct management and significant flexibility. However, it is important to note that the liability is unlimited, which means that personal assets are at risk in case of business debts.
- Ideal for: small businesses and self-employed individuals.
- Number of partners: minimum 1.
- Liability: unlimited.
- Minimum capital: no legal minimum required.
2. Civil Partnership (Sociedad Civil): Collaboration between professionals
Civil partnerships are ideal for professionals who want to work as a team, sharing responsibilities and profits. Whether it is a law firm formed by several partners or a collaborative architecture studio, this type of company offers flexibility and a democratic structure. However, the liability of the partners is unlimited, which implies significant financial risks.
- Ideal for: professionals who want to work as a team.
- Number of partners: minimum 2.
- Liability: unlimited.
- Minimum capital: not required.
3. Limited Liability Company (SL): Stability for small and medium-sized businesses
For those seeking stability and liability protection, limited liability types of companies in Spain are an attractive option. With a minimum share capital of 3,000 euros, this type of company allows partners to limit their liability to the capital contributed. From a local clothing store to a digital marketing agency, limited liability companies are suitable for a variety of medium-sized businesses.
- Ideal for: small and medium-sized businesses.
- Number of partners: minimum 1.
- Liability: limited to the capital contributed.
- Minimum capital: 3,000€.
4. Public Limited Company (SA): Mobilizing capital for ambitious projects
Public limited companies are the preferred option for large companies that require significant amounts of capital. With a minimum share capital of 60,000 euros, these companies can raise investments from numerous shareholders and carry out ambitious projects. From multinational companies to renowned banks, public limited companies are suitable for large-scale projects.
- Ideal for: large companies.
- Number of partners: minimum 1.
- Liability: limited to the capital contributed.
- Minimum capital: 60,000€
5. Cooperative Society (SCoop.): Collaboration for mutual benefit
Cooperative societies are based on the voluntary collaboration between people or entities to achieve shared economic, social, and cultural objectives. Whether it is an agricultural cooperative that grows and sells products in common or a housing cooperative that builds and manages residential buildings, this type of company promotes solidarity and mutual benefit.
- Ideal for: people who want to associate to carry out activities with a social focus.
- Number of partners: minimum 3.
- Liability: limited to the capital contributed.
- Minimum capital: fixed in the statutes of the cooperative.
6. General Partnership: The union of partners with common goals
In a general partnership type of company in Spain, all partners share rights and responsibilities jointly under a common name. Whether it is a family store run by all members or a law firm where partners share both profits and responsibilities, this type of company encourages close collaboration and equality among partners.
- Ideal for: professionals or entrepreneurs who want to collaborate on a project.
- Number of partners: minimum 2.
- Liability: subsidiary.
- Minimum capital: no legal minimum required.
7. Community of Property (CB): Association for shared projects
For those who want to start a joint project without forming a formal company, the community of property is a simple and flexible option. From freelancers who open a restaurant together to musicians who manage a band, this form of association allows responsibilities and profits to be shared equitably.
- Ideal for: freelancers who want to start a joint project.
- Number of partners: minimum 2.
- Liability: unlimited.
- Minimum capital: no legal minimum required.
8. Temporary Joint Venture (UTE): Temporary collaboration for specific projects
Temporary joint ventures are types of companies in Spain that are created to bid for large contracts and projects jointly. Whether it is a group of construction companies competing for a major contract or technology companies collaborating on a research project, temporary joint ventures offer an effective way to leverage complementary resources and capabilities.
- Ideal for: companies that join forces to bid for large projects.
- Duration: temporary, for the duration of the project.
- Liability: individual for each company.
- Minimum capital: no legal minimum required.
Expert advice for choosing the right type of company in Spain
Choosing the right legal form is a crucial step for any company wishing to establish itself in Spain. Each type of company has its own characteristics and requirements, so it is important to carefully evaluate the available options.
If you need advice or additional information to make this decision, do not hesitate to contact our “set up a company in Spain” department. We can help you at every step of the way to business success in Spain.
