What is a Limited Company?

When it comes to starting a new business, we have to take into account what kind of company suits us the most. There are several differentiated groups, such as the Limited Company. While it is true that any advice can inform us about them, it is advisable to inform before the advantages and disadvantages of each. If you are thinking of starting a business, we will show you what a Limited Company is, the most common legal form used by entrepreneurs today.

What is a limited society

The Limited Liability Company, also known as Sociedad Limitada, is the commercial company that is most used in places like Spain. Entrepreneurs who want to create a new business opt for this type of legal form to limit liability to the capital contributed. In this way, the employer avoids responding with his personal assets if the business contracts debts.

Partners of the Limited Partnership

The number of partners must be at least one and there is no maximum limit for them. If we choose a single partner, we must establish a limited sole proprietorship . The responsibility of these partners will be solidary among them and limited to the capital contributed. In addition, the same partners can be working partners or capitalist partners.

Name or Social Name

The name chosen for the Limited Partnership should no longer appear in the Central Mercantile Register. For this reason, we must ensure that it does not appear in the record followed by the expression SRL or SL

Social capital

As for the share capital, the legal minimum will be 3, 000 euros without a maximum limit. This social capital can be formed by monetary contributions or material cash.

Constitution of the Limited Company

The constitution of the Limited Company will be made by statutes and public deeds that must be signed before a notary. All this must be presented in the Commercial Registry. In addition, we must detail the corporate purpose (activity of the company) and the contributions made by each partner, as well as the percentage of social capital of each.

Advantages of the Limited Company

Among the advantages, we highlight the fact that the liability to potential creditors is limited to the social capital to the assets of the company. In addition, we can say that the bureaucratic procedures to establish this society and put it into operation are relatively simple. On the other hand, from a certain level of benefits, the taxes to which it is submitted are lower than those of the self-employed person. Also, they have greater facility to access bank loans.

Disadvantages

The main drawback is that the shares are not easily transmissible, since their sale will be completely regulated by the statutes established as well as by law. Therefore, it is not at all adequate if what we want is to attract as many investors as possible.