Types of Business Entities: Limited Liability, Cooperatives, and Labor Companies
Limited Liability Company (SL)
Features
- It is a mercantile society of the capitalist type.
- Number of members: One or more.
- Minimum capital: €3,005, fully subscribed and paid at the time of incorporation.
- The capital is divided into shares. Participation is a fraction of the capital. It is a title and is freely transferable (unless it is acquired by partners, ascendants, descendants, or companies in the same group), since it needs the consent of the board.
- To be validly constituted, it is necessary to execute the deed before a notary public and register it in the Mercantile Registry.
- Rights granted by a participation: Almost the same as an action.
- Company bodies:
- Board Meeting of Members: This is the meeting of members that, by voting (depending on capital), makes decisions.
- Administrators: Those who are responsible for management and representation.
- Title: The name must be followed by “Sociedad de Responsabilidad Limitada”, “Sociedad Limitada”, or “SL”.
New Limited Liability Company (SLNE)
The company is regulated as a special type of SL. This legal form aims to facilitate the creation of small and medium-sized enterprises, which are very important in creating jobs.
Features
- It is a special type of SL.
- Facilities for its creation and constitution: The use of online procedures and a single electronic document (DUE) that brings together all the data required for creation and operation. You can subscribe to using DUE within 48 hours from the granting of the deed.
- Number of partners: No more than five individuals. Legal entities are not allowed. Within a short period, shares should be transferred to individuals.
- Capital: Not less than €3,005 and not exceeding €120,202.
- Denomination: Name of one of the partners + alphanumeric code, followed by “SLNE” or “Sociedad Limitada Nueva Empresa”.
- Governing bodies: The joint meeting of members and an administrator (the administrator must be a member).
- Other features are similar to those of an SL.
Cooperative Society
- It is a company formed by people who have common interests or needs, who combine to perform a business activity directed at satisfying this need. It is non-profit, as it does not seek to maximize profit. If there are surpluses, they are normally invested in the business and are aimed at creating a reserve fund to ensure the development of the activity and a fund to promote the social environment.
- Number of partners: For 1st-degree cooperatives formed by individuals or legal entities, the minimum number depends on the autonomous region. In Galicia, a minimum of four is required. In 2nd-degree cooperatives, whose members are also cooperatives, there must be at least two.
- The capital is formed by contributions from partners.
- The capital is variable: Accession and withdrawal of membership are free.
- Liability is limited, except where otherwise stated in the statutes.
- The amount of share capital with which the cooperative must operate is set in the statutes and will be at least €3,005.06, fully paid at the time of formation.
- Denomination: Along with the name, “S. Coop” or “Sociedad Cooperativa” must appear.
- It is subject to corporate tax with tax credits.
- Governing bodies:
- General Meeting: The meeting of shareholders to deliberate and make agreements as the supreme expression of social will, forcing their agreements, which have been properly adopted, on all members. In a cooperative, each member has one vote.
- Governing Council: This is the representative and management body. Its members are elected by the General Meeting.
- The Auditor: Oversees and manages the annual accounts, books, and other documents.
- To be validly constituted, the public deed must be executed before a notary and signed in the Central or Provincial Autonomous Community Cooperative Registry, depending on the type of cooperative.
- Some rights of shareholders: The right to receive information, to receive a return on the cooperative share in light of the activities or operations performed by each of the cooperative members (and not according to the capital contributed), to be elected and eligible for the governing bodies, and the return of capital contributions, if any.
Labor Companies
These are SAs (Sociedad Anónima) or SLs in which at least 51% of the capital is owned by the workers who provide services in it and whose employment relationship with the company is indefinite.
Features
- Number of partners: More than three.
- There are two classes of shares or units: Labor class (for worker members) and general class (for non-member employees, if any).
- No partner can have more than 1/3 of the capital unless the partner is a public or non-profit organization. In this case, their stake cannot reach 50%.
- They have tax benefits.
- Denomination: Name followed by the initials “SAL” or “SLL”.
- Other features are similar to those of SAs and SLs.