Sociedad Limitada (SL — Limited Company)
Sociedad Limitada (SL — Limited Company) — A Sociedad Limitada (SL) is Spain’s most common type of limited liability company, equivalent to a UK Ltd or a US LLC. It provides limited liability to its shareholders (socios), meaning personal assets are protected from business debts, and requires a minimum share capital of €3,000 to incorporate.
The SL is the default choice for most small and medium businesses in Spain. It offers the liability protection of a corporation without the complexity and expense of a Sociedad Anónima (SA). Formation is relatively straightforward but involves several sequential steps that typically take 4 to 8 weeks. Recent reforms have introduced the possibility of incorporating an SL online in 48 hours using model statutes, though in practice most businesses still use customised articles of association.
Steps to Form an SL
- Obtain a Certificación Negativa de Denominación Social (company name reservation) from the Registro Mercantil Central
- Open a bank account and deposit the minimum €3,000 share capital
- Draft the articles of association (estatutos sociales)
- Sign the incorporation deed (escritura de constitución) before a notary
- Obtain a provisional NIF/CIF from the tax office
- Register the company at the Registro Mercantil (Commercial Registry)
- Obtain the definitive NIF and register for VAT and other tax obligations
Key Facts About the SL
- Minimum share capital: €3,000 (must be fully paid at incorporation)
- Limited liability: shareholders are only liable up to their capital contribution
- Corporate tax rate: 25% (15% for the first two profitable years for new companies)
- At least one shareholder (sole shareholder = Sociedad Limitada Unipersonal, SLU)
- Shares (participaciones) cannot be freely transferred to third parties without offering them to existing partners first
- Annual accounts must be filed at the Registro Mercantil
- Foreign nationals can own and manage an SL, though a NIF/NIE is required
Related Legal Terms
- Sociedad Anónima (SA — Public Company)
- NIF (Tax Identification Number)
- Registro Mercantil (Commercial Registry)
- Autónomo (Self-Employed Registration)
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