S.A. Company Registration in Spain - Business Starting & Setup

The Spanish legal system is a civil law system based on comprehensive legal codes and laws rooted in Roman law.

The principal forms of business organization in Spain are:

Sole Trader (Empresario Individual or Autónomo)General Partnership (Sociedad Regular Colectiva, abbreviated as “S.R.S.” or “S.C.”)Limited Partnership (Sociedad en Camandita, abbreviated as “S. en Com. or “S. Com.”)Cooperative (Sociedad Cooperativa)Corporation (Sociedad Anónima, abbreviated as “S.A.”)Limited Liability Company (Sociedad de Responsabilidad Limitada, abbreviated as “S.L.” or “S.R.L.”)New Limited Liability Company (Sociedad Limitada Nueva Empresa abbreviated as “S.L.N.E.”)

In most cases, the choice is between Sociedad Limitada and Sociedad Anonima.

There is a range of requirements to the company name of SA in Spain:

• A company name may make reference to one or several economic activities or it may be imaginative.
• A company name which makes reference to an activity that is not included in the corporate purpose may not be chosen.
• It may not include, totally or partially, the name or pseudonym of any individual or body corporate without authorization or consent. Whenever authorization is required for a company name request, this should be presented along with the signature of the authorizing party, duly legalized by a Notary. The authorization of a body corporate should be effected by the corresponding board of directors, whose decision shall be duly certified.
• The company name should be followed by its company type: in case of SA it is Sociedad Anónima, abbreviated as “S.A.”.
• The abbreviation or anagram of the company may not be added to it.
• A company or organization whose name is identical to another already existing may not be recorded in the Mercantile Register. When a company name already exists in another language, it is understood that these are identical.

The incorporation of a Spanish SA includes the following steps:

1. Grant an apostilled power of attorney for incorporation to the legal representative
2. Obtain a certification of uniqueness of proposed company name (certificación negativa de la denominación social) from the Mercantile Register – 2 days
3. Open a bank account for the company; deposit capital in the bank and obtain a deposit certificate – 1 day
4. Grant a public deed of incorporation before a public notary – 1 day
5. Submit Declaración Censal de Inicio de Actividad and obtain the Tax Identification Number (Numero de Identificación Fiscal, NIF) from the Delegación Provincial de la Agencia Estatal de la Administración Tributaria – 1 day
6. Obtain a tax declaration of exemption from the Dirección General de Tributos - Consejería Hacienda Comunidad Madrid – 1 day
7. File the public deed of incorporation of the company for its registration with the Mercantile Registry – 6 days and up to 15 days
8. Legalize company books – 10 days
9. Submit a notification of start of operations (declaración responsable) to a private agency authorized by the municipality (ECLU) – 1 day
10. File for social security and affiliate all workers with the local general treasury of social security (Tesorería General de la Seguridad Social) – 1 day (simultaneous with previous procedure)
11. Notify the Delegación Provincial de la Consejería de Trabajo e Industria – 1 day (simultaneous with previous procedure)

Spanish company should have at one director or several directors (acting jointly or individually), it being necessary to establish a Board of Directors when the number of joint directors is three or more. There are no legal restrictions on the nationality of the shareholders and/or directors, although practical reasons make it advisable that day-to-day management be carried out by a Spanish resident. Directors can be both individuals and corporate bodies.

A director can act for a maximum of six years (reelection is possible).

Directors should attend shareholders’ meeting. There are no requirements for directors’ meetings.

Directors’ details appear on public profile.

There are no statuary requirements for a company secretary.

A Spanish company should have 1 shareholder, but it should be noted, that concerning companies with 1 shareholder there are some special reporting requirements. The fact that the company has one shareholder should be registered in the appropriate Commercial Registry, all the contracts between the company and its sole owner need to be recorded in a special company register.

Founders' details appear on a public profile, but not other shareholders.

The shareholders’ meeting is the supreme governing body of the company. It should be held in the municipality where the company has its registered office. However, the articles of association may legitimately establish otherwise.

In Spain, beneficial owner is disclosed on the stage of registration, since according to Spanish law Notary Public is obliged to file “real owner” declaration to the Commercial Registry.

Commercial Registry, Tax authorities and Public notary (in case) have full ownership information, or have an access (through getting information from each other) to such information.

Nominee institute does not exist in Spain.

In September 2023, rules for the creation and operation of a central public register of ultimate beneficiaries will come into force in Spain.

The rules apply to all Spanish legal entities and other entities without legal personality:

• that have a place of effective management in Spain or have their principal activity in Spain;
• that are managed or administered by individuals or legal entities residing or established in Spain.

For each beneficiary, the following data must be provided:

• full name;
• date of birth;
• identity document and country of issue;
• country of residence;
• nationality;
• e-mail address; and
• the criteria for being classified as a UBO.

The registry is not entirely public. Members of the public wishing to access information on the register will have to prove their identity and provide evidence of their legitimate interest.

They may be provided with the following information:

• full name;
• month and year of birth;
• country of residence and nationality;
• details of the nature of beneficial ownership.

Access will be available within the limits of current information and may be restricted if the beneficiary requests confidentiality on the basis of being at disproportionate risk.

The minimum subscribed capital for an S.A. is 60,000 euro; at least 25% of the par value of all the shares must be paid before incorporation.

The shares of S.A. can be registered or can be bearer shares. But the shares must be registered in case they are not fully paid, if their transferability is subject to restrictions or if they are subject to ancillary obligations.

Registered shares must entered in a ledger, which records share transfer, including the name, surname, company name, nationality and the address of shareholder.

Shares may be either issued physically (certificate of shares) or recorded by a book-entry system.

S.A. shares may be negotiated on stock markets.

Privileges regarding voting rights are not allowed, but shares without voting rights can exist.

Shares may be issued with a premium payable to the company above their par value

The S.A. may issue debentures or other negotiable securities.

The shares of an S.A. can only be paid with money or property, not with labor or services.

The ancillary obligation is a device whereby the labor or services or other obligations of particular shareholders can be tied to the corporation.

Ancillary obligations are connected with performing certain acts or refraining from performing certain acts; they do not form the part of the capital stock of the company.

Non-EU nationals should obtain work visa and residence permit; they also should be granted the proper kind of a work permit, which depends on the type of work and its duration.

As a general rule, foreign investments are subject only to notification after the investment to the Investments Register at the Ministry of Economic Affairs and Competitiveness. Both the owner of the investment and Spanish public notary, acting in the transaction, are obliged to notify authorities about the investment. Investments from tax havens must be reported before and after the transaction.

The General Directorate for Trade and Investments (monitors foreign investments) can require Spanish companies, which have foreign shareholders and Spanish branches of non-resident persons specially or generally to file an annual report on the status of their foreign investments; information about certain cases can also be required by DGCI.

During the two years following incorporation, shareholders’ meeting must approve acquisition of assets for a consideration involving amounts in excess of 10% (before the deal), unless such acquisitions are within the scope of ordinary business of the company. Approval procedure contains a director’s report on the topic and an independent valuation by the expert appointed by the Commercial Registry.

It is a legal requirement for your company to have a registered office in Spain, which may be any address where the Spanish company declares to have its headquarters. The registered office will be public.

The following should be kept at the registered office: register of shareholders; accounting records (for the last 4 years) in tax purposes; by-laws.

There is no statuary requirement to have a seal.

Redimiciliation to and from Spain is permitted.

Dissolution is entailed as per the law or by-law, under court ruling, by mere decision of general meeting.

Causes of dissolution:

upon interruption of the activity or activities that constitute its corporate purpose; in particular, inactivity for over one year shall be deemed to constitute interruption;upon termination of the mission that constitutes its corporate purpose;where achievement of the corporate purpose is manifestly impossible;due to governing body standstill, rendering it impossible to conduct business;due to losses that reduce its equity to an amount lower than one half of the share capital;due to a capital reduction to a sum below the legal minimum;because the par value of non-voting stakes or shares exceeds one half of the paid-up capital and the due proportion is not recovered within two years;for any other cause established in the by-laws.

Dissolution of corporate enterprises should be registered at Mercantile Register and published in the Official Journal of the Mercantile Registry.

The general meeting may agree to restore a dissolved company to active life, provided that the cause for which it was dissolved is remedied. Reactivation decisions may not be made where the dissolution was constituted as per the law.

Dissolution initiates a liquidation period.

Liquidation may be instituted in insolvency proceedings.

Where dissolution is the result of the institution of liquidation proceedings in a company having arranged a composition with creditors, liquidators shall not be appointed.

Unless the shareholders unanimously decide otherwise, they shall be entitled to receive their dividend liquidation in cash.

The public instrument on liquidation shall be registered in the Mercantile Registry.