Types of Companies: Sole Trader

Anglo-Spanish Chartered Accountants

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Types of Companies in Spain

Sole Trader

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.

 
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