The business name is the name of the owner of the business, although the business can use a commercial name.

There is no minimum share capital requirement.
The business does not have its own legal status as an entity separate from its owner. Therefore, the sole trader has unlimited liability in relation to the business activities, thus he/she is liable with all their personal assets.
In summary, the main advantages of this legal form are as follows:

• There is no need to incorporate the business, just register with the Tax and Social Security authorities.
• There is no minimum initial capital.

The main disadvantage of this legal form is that in the case of third-party liability, if the business cannot meet all its obligations with all of its assets and, the sole trader would respond for the difference with their personal wealth.

The naming for this type of entity is un-regulated, therefore any name may be used.

This is, in effect, more than one sole trader carrying out a business jointly in partnership.

There is no initial minimum or maximum share capital.

A “sociedad civil” does not have its own legal identity. However, it has the capacity to act in the legal system on behalf of its members.
The partners have unlimited liability in relation to the business activities of the “sociedad civil”, thus they are liable with all their personal assets, jointly and individually.

The profits of the “sociedad civil” are taxable as personal income tax. Each member of the community must declare his/her share of the profits in their own income tax return.

In summary, the main advantages of this legal form are as follows:

• The incorporation process is simpler that with other forms, as a private partnership agreement is sufficient.
• There is no minimum initial capital.

The main disadvantage of this legal form is that in the case of third-party liability, if the partnership cannot meet all its obligations with all of its assets and, the sole trader would respond for the difference with their personal wealth.

The company name must be different from any other company (certified by the Central Mercantile Registry).

The minimum number of shareholders is one. When a company only has one shareholder it is described as a Sociedad Limitada Unipersonal (S.L.U.).

The minimum share capital required to incorporate a “sociedad limitada” amounts to €3,005.06. The full amount of the share capital must be paid out, either in cash or in property. The share capital is divided into nominal shares “participaciones nominativas”.

A limited company has its own legal status as an entity separate from its shareholders.

The shareholders enjoy limited liability, thus their personal exposure is limited to the shareholder’s funds. It must be noted, however, that directors can be liable with their personal wealth should they trade unlawfully.
The profits of the “sociedad limitada” are taxable via corporation tax.

In summary, the main advantages of this legal form are as follows:

• Limited liability.
• Individuals may be shareholders.
• May have a single shareholder (S.L.Unipersonal).
• Legislation is less strict than for S.A.s
• It is most commonly chosen.

The main disadvantages of this legal form are as follows:

• May not be suitable for certain businesses, such as banks and insurance companies.
• Incorporation can be lengthy as it usually takes between 20 and 30 days.
• There are relatively high bureaucratic burdens in terms of compliance obligations, such as preparation of annual accounts.

The company name must be the name of the owner of the business plus the code assigned by the Administration.

The minimum number of shareholders is one up to a maximum of 5 shareholders.

Shareholders must be individuals, not companies. The same person may not be a shareholder of more than one S.L.N.E.

The minimum share capital required to incorporate a “sociedad limitada nueva empresa” amounts to €3,012 up to a maximum of €120,202. The full amount of the share capital must be paid out in cash on incorporation.

This type of limited company has its own legal status as an entity separate from its shareholders.
The shareholders enjoy limited liability, thus their personal exposure is limited to the shareholder’s funds. It must be noted, however, that directors can be liable with their personal wealth should they trade unlawfully.

The profits of the “sociedad limitada nueva empresa” are taxable via corporation tax.

In summary, the main advantages of this legal form are as follows:

• Limited liability.
• Certain financial advantages in the year following the year of incorporation.

The main disadvantages of this legal form are as follows:

• The minimum share capital must be in cash.
• Shareholders must be individuals.
• The company name will include the name of one of the shareholders.
• The company business is limited to certain activities.
• Incorporation can be lengthy as it usually takes between 20 and 30 days.
• There are relatively high bureaucratic burdens in terms of compliance obligations, such as preparation of annual accounts.

The company name must be different from any other company (certified by the Central Mercantile Registry).

The minimum number of shareholders is one. When the company only has one shareholder it is described as a Sociedad Anónima Unipersonal (S.A.U.).

The minimum share capital required to incorporate a “sociedad anónima” amounts to €60,101.21. The share capital must be fully subscribed and at least 25% paid out in cash or property. The capital is divided into shares.
This type of company has its own legal status as an entity separate from its shareholders.

The shareholders enjoy limited liability, thus their personal exposure is limited to the shareholder’s funds. It must be noted, however, that directors can be liable with their personal wealth should they trade unlawfully.
The profits of the “sociedad anónima” are taxable via corporation tax.

In summary, the main advantages of this legal form are as follows:

• Limited liability.
• Individuals may be shareholders.
• Shareholders may be transferred.
• Shares may be freely transferred.

The main disadvantage of this legal form is that incorporation and compliance is more complex. Therefore, it is only recommended for high volume companies.

The company name must be different from any other company (certified by the Central Mercantile Registry).

The minimum number of shareholders is three. No single shareholder may own shares representing more than 1/3 of the share capital. The key characteristic of this type of company is that shareholders work in the company.

The minimum share capital required to incorporate a “sociedad limitada laboral” amounts to €3,012 which must be fully paid. 51% of the share capital must belong to the working shareholders.

This type of company has its own legal status as an entity separate from its shareholders.

The shareholders enjoy limited liability, thus their personal exposure is limited to the shareholder’s funds. It must be noted, however, that directors can be liable with their personal wealth should they trade unlawfully.
The profits of the “sociedad limitada laboral” are taxable via corporation tax.

In summary, the main advantages of this legal form are as follows:

• Limited liability.
• Advantages regarding to social security when following certain regulations.
• The working shareholders control the company. 

The main disadvantages of this legal form are as follows:

• The existence of two types of shareholders (capital shareholders and working shareholders) may cause difficulties when taking decisions.
• The shares may not be freely transferred.
• Incorporation can be lengthy as it usually takes between 20 and 30 days.
• There are relatively high bureaucratic burdens in terms of compliance obligations, such as preparation of annual accounts.

The company name must be different from any other company (certified by the Central Mercantile Registry).

The minimum number of shareholders is three in first grade co-operatives and two in the second or last grade. Legislation may vary according to the autonomous community where the company is incorporated.

The minimum and maximum share capital is variable. Share capital can be paid in cash or property. It can also be obligatory or voluntary. All of which it is fixed within the company statutes (Memorandum and Articles of association).
This type of company has its own legal status as an entity separate from its shareholders.

The shareholders enjoy limited liability, thus their personal exposure is limited to the shareholder’s funds. It must be noted, however, that directors can be liable with their personal wealth should they trade unlawfully.

The profits of the “sociedad cooperativa” are taxable via corporation tax.

In summary, the main advantages of this legal form are as follows:

• Limited liability.
• Special status regarding corporation tax.
• Tax exemptions and advantages.
• Shareholders may join and leave voluntarily.
• The objective is the common good, not profit.

The main disadvantages of this legal form are as follows:

• May lead to difficulties when making decisions.
• Limits the number of employees who are not shareholders.

The naming for this type of entity is un-regulated, therefore any name may be used.

There is no legal minimum number of shareholders/members (comuneros).

There is no initial minimum or maximum share capital. A member may contribute only property. However, he or she may not contribute just money or work.

A “comunidad de bienes” does not have its own legal identity. However, it has the capacity to act in the legal system on behalf of its members.

The members have unlimited liability in relation to the business activities of the “comunidad de bienes”, thus they are liable with all their personal assets, jointly and individually.

The profits of the “comunidad de bienes” are taxable as personal income tax. Each member of the community must declare his/her share of the profits in their own income tax return.

In summary, the main advantages of this legal form are as follows:

• The incorporation process is simpler that with other forms (a public title deed is only required when property is involved).
• Membership of the “comunidad de bienes” is voluntary.
• There is no minimum initial capital.

The main disadvantage of this legal form is that in the case of third-party liability, if the community cannot meet all its obligations with all of its assets and, the members would respond for the difference with their personal wealth.