Types of Companies: Socciedad Cooperativa

Anglo-Spanish Chartered Accountants

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Types of Companies in Spain

Sociedad Cooperativa

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.
 
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