Spain — Business: Limited Company (Sociedad Limitada)
The Sociedad Limitada (SL) is Spain's standard limited-liability company vehicle. Since Ley 18/2022 (Crea y Crece), the minimum share capital is just €1, though companies capitalized below €3,000 must build a 20% profit reserve each year until capital plus reserves reaches €3,000, and face restrictions on dividend distribution and director liability exposure until then; incorporating with the traditional €3,000 capital avoids these restrictions entirely. Shareholder liability is limited to capital contributed. Governance requires at least one director (administrador) and an annual general meeting to approve accounts. SLs are the default vehicle for SMEs and startups; larger or publicly-traded entities typically use the Sociedad Anónima (SA) structure instead, which requires €60,000 minimum capital.
Minimum share capital: €1 (Ley 18/2022 Crea y Crece), but sub-€3,000 capitalization requires a 20% annual profit reserve until capital+reserves reach €3,000, with dividend/liability restrictions until then.
Incorporating with €3,000 capital avoids the reserve-building requirement and associated restrictions.
Shareholder liability is limited to the capital contributed.
SA (Sociedad Anónima) is the alternative structure for larger/listed companies, requiring €60,000 minimum capital.
Costs
Minimum share capital (legal floor): €1
Recommended share capital (avoids reserve/dividend restrictions): €3,000
Common Mistakes
Incorporating with €1 capital without understanding the mandatory 20% profit-reserve requirement and dividend restrictions that follow.
Choosing SL when the business plan anticipates raising capital via public listing, where SA is the required structure.