Spanish Legal Entities: Corporations, Foundations, and Associations

Posted on Sep 6, 2025 in Law & Jurisprudence

Types of Legal Entities

Introduction

Together with individuals, certain complex social realities are recognized to have a separate legal personality by operation of law.

  • Concept: Legal or artificial persons (personas jurídicas) are artificial constructions resulting from endowing certain social realities beyond individuals with personifying attributes.
  • The act of recognizing separate legal personality for certain realities is ultimately an option of legislative policy.
  • Thus, whereas groups of persons, such as families or co-owners, do not have separate personality, certain associations and companies enjoy legal personality, separate and distinct from their members.
  • As legal persons, rights are conferred to and duties are imposed on such complex realities, and individual-related qualities are attributed to them (nationality, domicile, name, patrimony).

Purpose of Separate Legal Personality

The notion of separate legal personality, traditionally reserved for social realities pursuing an aim of public interest (cities, municipalities, and guilds), has been extended to also cover associations with an aim of making profit (commercial companies).

Nevertheless, the degree of legal personalization differs among different classes of profit-making organizations:

  • Sociedades capitalistas: (Capitalist societies) Legal personality is fully attributed so as to entail the distinct separation between members’ and company’s patrimonial spheres (sociedad anónima and sociedad limitada).
  • Sociedades personalistas: (Partnerships) Legal personality manifests to a more limited extent insofar as members are also personally and unlimitedly liable for social debts on a subsidiary basis (sociedad colectiva and sociedad civil).

Legal Personality Features

  • It is a technique to attribute individuality to a group of members.
  • Organizations with separate legal personality are empowered to act, enter into contracts, and have a separate patrimony.
  • Obligations deriving from professional status are imposed on organizations as collective entities.

Regulation of Legal Personality

  • Articles 35-39 CC constitute the main legal basis for the attribution of legal personality under Spanish rules.
  • In conformity with a numerus clausus scheme, only corporations, foundations, and associations with private interest (either civil, commercial, or industrial) are qualified as entities with legal personality.
  • THIS MEANS THAT LEGAL PERSONALITY IS ALWAYS ATTRIBUTED BY OPERATION OF LAW.
  • Article 35 CC provides that legal personality is acquired by the fulfillment of certain conditions laid down by the law without the need for a specific act of attribution (sometimes registration is required).

Foundations (Fundaciones)

Concept

A foundation is a non-profit organization intended for pursuing goals of general interest, to whose attainment its patrimony, according to the will of founders, is bound on a durable basis. They are philanthropic institutions.

Regulation

  • Article 34 SC acknowledges the right to create general interest purpose foundations, and Law 50/2002 of 26 December (hereinafter, Foundations Law or FL).
  • Foundations are ruled by the will of the founder, its Bylaws, and, in any event, by the law.

Characteristics

  • The goal of the foundation has to benefit a generic community of persons, in the sense of an undetermined group of persons. Therefore, foundations cannot, in any event, have as their goal the benefit of the founder, managers, or their relatives.
  • The specialty of foundations is that they are legal persons but they are not constituted by a group of people. Foundations consist of a patrimony dedicated by the founders to a certain purpose. The initial patrimony of a foundation is called endowment (dotación). The endowment has to be sufficient to fulfill the foundation’s goals.

Constitution

  • Foundations can be constituted by an “inter vivos” act or by the founder’s testament if it complies with the requirements stated for the Articles of Incorporation (escritura de constitución, Article 10 FL).

Acquisition of Legal Personality

  • The foundation will have legal personality from the moment of registration with the Foundation Registry (Article 4 FL).

Content of the Articles of Association

  • Personal data of the founder.
  • The will to create the foundation.
  • The endowment.
  • The Bylaws of the foundation.
  • The identification of the persons who are to be members of the Board of Managers (Patronato) and their acceptance.

Functioning

  • The functioning of the foundation is set in its Bylaws. According to Article 11 FL, these will include:
  • Name of the foundation.
  • Foundation’s goals.
  • Domicile and territorial scope of its principal activities.
  • Basic rules for the allocation of resources to the fulfillment of the goals and determination of beneficiaries.
  • Composition and functioning rules of the Board of Managers.

Management and Representation

  • Corresponds to the Board of Managers, constituted by a minimum of three members (patronos).

Role of the Protectorate

  • The foundation needs the authorization of the Protectorate in order to dispose of its assets, especially the endowment.

Associations

Concept

Associations are groups of persons organized on a stable basis with the purpose of achieving a common aim, according to four main features:

  • An association is based on a personal substratum, a group of persons.
  • An association differs from a mere conglomeration, as the former is endowed with rules governing internal functioning, operation of bodies, and decision-making.
  • An association is devoted to achieving a common and predefined aim.
  • Associations are distinguished by their natural leaning towards stability.
  • Scholars describe associations as the general type and companies as a specific subtype.

Regulation of Associations

  • Article 22 SC proclaims freedom of association.
  • Organic Law 1/2002, of 22 March:
  • Article 22 states that freedom of association involves the freedom to become a member of an association and the right to set up an association with no need for requisite authorization by public powers; and that associations must operate and make decisions on a democratic basis and with full respect for pluralism.

Capacity to Set Up an Association and Become a Member

  • Individuals are to have full legal capacity to exercise rights (but also emancipated and non-emancipated minors up to 14 years old with the consent of their guardians).
  • Certain individuals, due to their position, are subject to specific regulations on freedom of associations: armed forces members, judges, magistrates, and public prosecutors.
  • Public and private entities are authorized to create associations and become members thereof with the due consent of decision-making bodies.

Setting-Up Process

  • Starts with a multilateral agreement among the members formalized, either by deed or in a private document, by the legally called acta fundacional (“founding act”), containing members’ data, the promoters’ intent to create an association, association name, specific covenants, articles of association (Estatutos), appointed members of administration bodies, place and date of signature, and signatures of founding members.

Main Bodies of Associations

  • Are the “general assembly” as the decision-making body and the representation body, which is entrusted with Board-of-Director-like functions (consejo de administración).

Acquisition of Legal Personality

  • Associations acquire legal personality by the signing of the “founding act” either in a public or private instrument.

Registration

  • Registration is not a prerequisite for an association to acquire legal personality but merely for publicity purposes in the interest of third parties and its own members.
  • Competent registries: Registry of Associations, dependent on the Home Office (Ministerio del Interior) and Regional Registries of Associations within the territory of each Comunidad Autónoma (competent for recording associations and other facts related to associations subject to registration).

Capital Commercial Companies

Characteristics

  • Legal personality of the capitalist societies is fully attributed so as to entail the distinct separation between members’ and company’s patrimonial spheres.
  • Capital companies are looking to make a profit.
  • Registration in the Mercantile Registry is a prerequisite for acquiring legal personality.
  • Irregular societies (which have not been registered) may have personality as “sociedades civiles” or “sociedades colectivas” depending on whether its social purpose is commercial or civil.

Types

There are two main types of capitalist societies:

  1. “Sociedad Anónima” (SA) (equivalent to a “PLC” in the UK: Public Limited Company, a company whose shares may be traded publicly).
  2. “Sociedad de Responsabilidad Limitada” or “Sociedades Limitadas” (equivalent to a “Limited” or “Ltd.” in the UK: a private company limited by shares, the shares not being traded publicly).

Regulation

  • Consolidating Text of the Capital Companies Law, approved by Royal Legislative Decree 1/2010 of 2 July (Ley de Sociedades de Capital LSC). The LSC repeals and replaces the previously applicable laws to public limited companies (SAs) and limited liability companies (SLs).