What type of company to set up if you are going to start a business
Posted: Wed Jan 22, 2025 8:29 am
Nowadays there are all kinds of ways to start a business with hardly any investment . But when it comes to starting to work on your own, there are all kinds of doubts: one of the most common has to do with the types of companies when setting up a business .
In Spain there are all kinds of legal forms, with their characteristics, advantages and disadvantages. Public limited company, limited partnership, general partnership, limited partnership… We will tell you which option to choose for your business or company .
Types of companies and which one to choose for my business
The first thing you need to know is that choosing between one type of company or another will depend on the circumstances and nature of your business. Starting up alone is not the same as doing so with partners , as well as the available capital, responsibility...
single-member limited company
You may also be interested in: What is a Sole Proprietorship Limited Company?
The most common types of companies in Spain when setting up a paraguay phone number lead business are the limited company, public limited company, general partnership and limited partnership. We are going to look at these types of companies so that you can find the most suitable one for your business. However, if you have just started your business and do not have partners, we recommend that you start directly as a self-employed person, since it will be more profitable and easier than setting up a company.
Limited company
The most common legal form in Spain is the limited company. You can set it up by yourself as you only need one partner, and if there are more partners, the share capital is divided into shares. With the Crea y Crece law you can set up your company for 1 euro .
The great advantage is that the liability of the partners is limited, hence the name. So if your project goes wrong, you will not have to respond with your assets for possible losses.
Public limited company
The second most commonly used type of commercial company . In this case, the capital is divided into shares that can be freely transferred, and it also allows for a greater number of partners.
To set up this type of limited company, you need a capital of €60,000 and at the time of the public deed you must pay 25% of said capital. As in the previous case, it can be set up as a sole proprietorship since it only requires one partner.
The advantages of a limited company are that you can easily transfer shares , making it easier to bring in new partners or sell your company. And the liability of the partners is limited to the capital they have contributed. You can also be listed on the stock exchange.
However, in addition to the initial amount, the procedures are more complicated, so setting up an SA is a longer process .
General partnership
Also called a cooperative : the partners not only contribute capital, but also their work. Therefore, the status of partner cannot be transferred, since the people who form part of a collective society contribute money, work or both.
business empowerment
You may also be interested in: How to set up a company in Spain, steps to follow
The liability is unlimited, which is why there is a great danger: all partners are personally and jointly liable with all of their assets for possible debts.
Its main advantage is the ease of its structure and operation , together with strict control over the access of new partners. It also has no minimum capital, but the inability to resort to external managers and the unlimited liability make it one of the least used types of company.
Limited partnership
Finally, we have the limited partnership, very similar to the general partnership but which allows some partners not to be in charge of management. In this case there are two types of partners: general partners who have the same characteristics as in a cooperative (their liability is unlimited) and limited partners , whose only liability is limited to the capital they have contributed, so the risk is much lower.
So the advantages are that there are partners who have less liability than in a general partnership, but there are still partners with full financial liability. That is why there are few such partnerships.
At MASMOVIL NEGOCIOS we hope to have helped you understand the types of companies that exist when starting a business so that you know all the options available to you.
In Spain there are all kinds of legal forms, with their characteristics, advantages and disadvantages. Public limited company, limited partnership, general partnership, limited partnership… We will tell you which option to choose for your business or company .
Types of companies and which one to choose for my business
The first thing you need to know is that choosing between one type of company or another will depend on the circumstances and nature of your business. Starting up alone is not the same as doing so with partners , as well as the available capital, responsibility...
single-member limited company
You may also be interested in: What is a Sole Proprietorship Limited Company?
The most common types of companies in Spain when setting up a paraguay phone number lead business are the limited company, public limited company, general partnership and limited partnership. We are going to look at these types of companies so that you can find the most suitable one for your business. However, if you have just started your business and do not have partners, we recommend that you start directly as a self-employed person, since it will be more profitable and easier than setting up a company.
Limited company
The most common legal form in Spain is the limited company. You can set it up by yourself as you only need one partner, and if there are more partners, the share capital is divided into shares. With the Crea y Crece law you can set up your company for 1 euro .
The great advantage is that the liability of the partners is limited, hence the name. So if your project goes wrong, you will not have to respond with your assets for possible losses.
Public limited company
The second most commonly used type of commercial company . In this case, the capital is divided into shares that can be freely transferred, and it also allows for a greater number of partners.
To set up this type of limited company, you need a capital of €60,000 and at the time of the public deed you must pay 25% of said capital. As in the previous case, it can be set up as a sole proprietorship since it only requires one partner.
The advantages of a limited company are that you can easily transfer shares , making it easier to bring in new partners or sell your company. And the liability of the partners is limited to the capital they have contributed. You can also be listed on the stock exchange.
However, in addition to the initial amount, the procedures are more complicated, so setting up an SA is a longer process .
General partnership
Also called a cooperative : the partners not only contribute capital, but also their work. Therefore, the status of partner cannot be transferred, since the people who form part of a collective society contribute money, work or both.
business empowerment
You may also be interested in: How to set up a company in Spain, steps to follow
The liability is unlimited, which is why there is a great danger: all partners are personally and jointly liable with all of their assets for possible debts.
Its main advantage is the ease of its structure and operation , together with strict control over the access of new partners. It also has no minimum capital, but the inability to resort to external managers and the unlimited liability make it one of the least used types of company.
Limited partnership
Finally, we have the limited partnership, very similar to the general partnership but which allows some partners not to be in charge of management. In this case there are two types of partners: general partners who have the same characteristics as in a cooperative (their liability is unlimited) and limited partners , whose only liability is limited to the capital they have contributed, so the risk is much lower.
So the advantages are that there are partners who have less liability than in a general partnership, but there are still partners with full financial liability. That is why there are few such partnerships.
At MASMOVIL NEGOCIOS we hope to have helped you understand the types of companies that exist when starting a business so that you know all the options available to you.