Types of Comapnies: Sociedad Limitada Laboral (S.L.L)

Anglo-Spanish Chartered Accountants

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Types of Companies in Spain

Sociedad Limitada Laboral

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.
 
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