Types of Companies: Sociedad Civil (Partnership)

Anglo-Spanish Chartered Accountants

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Types of Companies in Spain

Sociedad Civil (Partnership)

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

This is, in effect, more that 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.

 
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