A limited company is a type of commercial enterprise formed by natural persons that limits civil liability to the capital provided.
As it is one of the most widely used types of company, it’s interesting to learn about how to create one and the mechanisms for getting it incorporated.
Creating a limited company:
1. Choose your company name
You need to first choose the name of your company and go to the registry to request a company name certificate, proving that the name is available. You will need to present a list of five names ordered according to your preferences and as soon as the certificate is given to you, you will have three months to go to a notary to present it.
2. Open a bank account for your company
You will need to open a bank account under the name of your company and deposit at least €3,000 into that account. The bank will give you an accreditation certificate that you will have to present before a notary. Once you finish the limited company creation process, you will be able to use the money deposited.
3. Limited company statutes and deed
You need to choose the regulations that lay the foundation for your new company and deliver them to a notary to make the deed of incorporation and thus proceed with its registration. These regulations must include:
- Corporate objective
- Partners’ shares
4. Patrimonial transfer tax
You cannot register the company without first paying the patrimonial transfer tax. After submitting the deed, you will have 30 working days to pay the tax. The cost will be 1% of the initial capital of the company.
5. Register the limited company in the mercantile register
The law grants a period of two months to register the company and you must do so using the mercantile register corresponding to your registered office address. Once your limited company has been created, it will acquire a legal personality.
6. The Spanish tax authorities
You’ve almost finished setting up your limited company, but you still need to go through several formalities with the Spanish tax authorities so you don’t waste all your hard work.
- Tax identification number (NIF): Submit Form 036 together with the deed and the applicant’s ID card to request a provisional tax identification number. You will have to swap it for a permanent one within the next 6 months.
- Trade income tax (IAE): Register for trade income tax and present your provisional NIF and the corresponding form to the tax authorities (the form will depend on your business category).
- Census declaration: You will need to present the IAE registration document, Form 036 and the NIF.
- Permanent NIF: Go back to the tax authorities to obtain your company’s permanent NIF.
7. Get your company’s opening licence
Your new business is now up and running, but you’ve still got something to do. You need to request your employer identification number to get an opening licence and be able to hire workers.
Now you know all the steps for setting up a limited company, but you still need to know how much it will cost you to do this.
How much does it cost to set up a limited company?
It will depend on notary fees and taxes, but for a company with the minimum capital (€3,000), it will cost approximately €500.
For more information, check our service of Company Formation.