When building a company in Spain, one of the most widely used legal forms is, without a doubt, the public limited company. This not only helps the company have ample resources, but investment risks can also be minimized.
But What is a limited company? What are their characteristics? How can it be constituted? If you are interested in the subject, then we help you to know it a little more thoroughly.
What is a limited company
A joint-stock company, also known by its acronym, SA, or as a joint-stock company, is a commercial company in which the partners have limited liability for the capital they have contributed. That is, each one is responsible for the part of capital that has invested, not for the total.
The specific objectives of the Pan-Hispanic dictionary of legal Spanish defines the corporation on the table:
"Capital mercantile company, in which it is divided into aliquots called shares and in which the partners are not personally liable for the corporate debts."
Characteristics of the corporation
From its concept we can select a series of characteristics that define the corporation. These are:
- Its capital is divided into shares. Each partner contributes capital x, which is transformed into shares of that company or company. Therefore, the partners end up becoming shareholders and participate based on the shares they have. In other words, whoever contributes more has more shares. These in turn can be sold freely, provided that the owner's decision to do so has been made.
- There is a limited liability to capital. Because each shareholder puts a part of the capital, we find that their liability to third parties is not unlimited but is based only on the value of those shares.
- Shareholders do not have to make themselves known. As a public limited company, the shareholders, although they are linked to the company, do not have to make their participation public. In other words, they don't have to take office or work for society. They are considered capitalist partners or capitalist shareholders.
- A corporation is taxed through Corporation Tax and, in addition, they have their own legal personality.
- Has mandatory organs. Specifically, you must have:
- A General Shareholders' Meeting: where meetings with shareholders are called to discuss the operation and management of the company.
- Company administrators: to form the company team. These are always chosen at the general shareholders' meeting.
- Supervisory Council: it is optional and is in charge of ensuring that the administrators fulfill their function adequately.
Advantages and disadvantages of the SA
Despite the fact that the public limited company can be seen as a very suitable business figure for certain cases, and that there is no doubt that it brings many advantages, it also has some disadvantages that must be taken into account.
As for the advantages, these are very defined, and they are:
A competitive advantage
In the fact that, by professionalizing the business, you are making it look more solid. In addition, having capitalist partners, who do not have to take part of the functional responsibilities or the running of the company, offers more freedom when managing it.
And it is that the company can have the capital contribution of several people but who do not influence the progress of the business, beyond meetings.
Can be expanded
Having a limited company allows you to increase the possibilities to expand. And, in this case, there is no minimum or maximum number of partners to contribute capital.
New sources of financing are obtained
The fact that the share capital can be fragmented and that each partner contributes an amount allows new sources of financing to be obtained and, with it, new investors who, directly or indirectly, will increase the expansion of the business and the possibilities of this.
Now, in the case of disadvantages of a corporation, there are also several to consider, such as:
Wrong decisions are made
It does not always have to happen, but there is a greater probability that this will occur because the partners themselves, although they do not have managerial positions in the company, actually they have all the power. They retain voting, participation and decision rights, which implies that they can change the course of the company if they want, interfering in any aspect of that business.
And the problem is that their authority is much more important than that of the members who run or manage the company.
It can be difficult for all equity partners to participate
Especially in meetings where the progress of the business must be discussed. When there are many capitalist partners and it is necessary to meet all of them, you may find that many do not attend the appointment.
Esto hinders the communication channel or it can end up in the end that they tire of society if they do not see benefits.
How to incorporate a limited company
Now that you know what a corporation is and its virtues as well as its defects, do you want to set up an SA? The first thing you should know is that this is governed by the Capital Companies Law (Royal Legislative Decree 1/2010, which approves the revised text of the Capital Companies Act), which is where the requirements that must be met are stated. Among them, there is the fact of being done through a public deed, as well as registering in the Mercantile Registry with a name or company name followed by the initials that identify it as anonymous (SA).
La articles of incorporation It must contain the following data:
- Company name or complete data of the grantors, depending on whether they are legal persons or natural persons respectively.
- A statement that establishes that the grantors have the will to create a public limited company.
- It is established how much the constitution expenses will be, approximately.
- Bylaws of the corporation. These must be accepted by all grantors.
- Data of the administrators, whether they are natural or legal persons.
Also, you have to certify that a minimum share capital is provided. This is 60000 euros, divided into registered shares that will be proportional to the capital that each partner is investing in the company. Of all that capital, when it is constituted, 25% of it must be contributed, and it must be agreed to enter the remaining amount to it.
Now that you know more about the corporation, is it the legal entity you need?