How to Form a Limited Liability Company (SL) in Spain: Step-by-Step Guide with Real Costs

Forming a Limited Liability Company (SL) in Spain

The Sociedad de Responsabilidad Limitada (SL) is Spain's most popular business entity. According to the Central Commercial Registry, over 98% of new companies formed each year adopt this structure. Its popularity stems from limited liability, management flexibility, and an accessible minimum capital requirement.

This article covers the entire formation process, from name reservation to tax registration, with real costs and timelines.

Legal Framework

The SL is governed by Royal Legislative Decree 1/2010 approving the Consolidated Text of the Capital Companies Act (LSC), supplemented by the Commercial Registry Regulations and Law 14/2013 supporting entrepreneurs.

Step 1: Company Name Reservation

What It Is

A certificate issued by the Central Commercial Registry confirming that the chosen company name does not duplicate an existing one.

How to Obtain It

1. Apply online at www.rmc.es or in person
2. Up to 5 names may be proposed in order of preference
3. The certificate is issued in 24-48 hours (online) or 3-5 days (in person)

Cost and Validity

• Cost: EUR 13.52
• Validity: 6 months (renewable for 3 more months)

Step 2: Bank Account Opening and Capital Deposit

Minimum Capital

Art. 4 LSC establishes a minimum share capital of EUR 3,000 for an SL. It must be fully subscribed and paid up at formation.

Procedure

1. Open an account in the company's name (in formation) at a bank
2. Deposit the share capital (minimum EUR 3,000)
3. Request a bank certificate confirming the deposit
4. Present this certificate to the notary

Step 3: Drafting the Bylaws

Mandatory Minimum Content (Art. 23 LSC)

1. Company name: Including "Sociedad Limitada" or "S.L."
2. Corporate purpose: Business activities
3. Registered office: Municipality within Spain
4. Share capital: Amount, shares, numbering, and nominal value
5. Management structure: Sole director, joint directors, or board of directors
6. Decision-making procedures for corporate bodies

Recommended Clauses

• Ancillary obligations (Art. 86 LSC): Non-competition, exclusive dedication
• Share transfer restrictions (Art. 107 LSC): Pre-emption rights, board approval
• Withdrawal and exclusión causes (Arts. 346-350 LSC)
• Arbitration clause for corporate disputes

Step 4: Public Deed Before a Notary

Contents of the Formation Deed (Art. 22 LSC)

1. Identity of founding shareholders
2. Intent to form the SL
3. Each shareholder's contributions and allocated shares
4. Corporate bylaws
5. Identity of director(s)
6. Bank certificate of capital deposit
7. Name reservation certificate

Notarial Costs

Step 5: Provisional Tax ID (CIF)

1. Submit Form 036 to the Tax Agency
2. Attach a copy of the formation deed
3. Receive a provisional CIF (letter "B" followed by 8 digits)
4. The definitive CIF is assigned after Commercial Registry filing

Step 6: Transfer Tax (ITP)

Company formations have been exempt from Transfer Tax since 2010 (Art. 45.I.B.11 LITPAJD). However, Form 600 must still be filed with the regional government, marking the exemption.

Step 7: Commercial Registry Filing

1. Submit the public deed to the Provincial Commercial Registry
2. The Registrar reviews and, if correct, completes the filing
3. A registration number is assigned

Timeline and Costs

Realistic total timeline: 1-3 weeks.

Step 8: Post-Formation Tax Obligations

Definitive Tax Registration (Form 036/037)

• IAE headings (Business Activity Tax): Companies with turnover under EUR 1 million are exempt from payment but must register
• VAT obligations: General regime, equivalence surcharge, simplified regime
• Corporate Tax: General rate 25%, reduced rate 15% for new companies in their first 2 profitable tax periods

Express Formation: 48 Hours

Law 14/2013 enables online formation within 48 hours through the CIRCE system using standard bylaws:

Director Regime

Options (Art. 210 LSC)

Director Liability (Art. 236 LSC)

Directors are personally and jointly liable for damages caused by acts contrary to law, bylaws, or their duties of care and loyalty.

Total Cost Summary

Conclusion

Forming an SL in Spain is a straightforward and affordable process. Real costs, excluding share capital, range from EUR 264 to 934. The key lies in carefully drafting the bylaws, which will govern the company throughout its life.

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