How to set up a company: the most important legal aspects

How to set up a company: the most important legal aspects

In a world marked by the idea that nowadays it is more important to create jobs than to find them, we have witnessed the growth in the number of entrepreneurs who decide to set up their own company. This article will analyze the steps and requirements needed to set up a business:

What do I need to set up a company?

The first stop in setting up a company is to analyze the legal aspects of a company, depending on the type of company chosen. In accordance with the above, and to avoid an excessively dense article, we will focus on the 2 most common formulas of social type, that is, the Limited Company and the Public Limited Company.

The main differences between the two are:

1. Their personalistic component, in the case of Limited Companies, that is, those that guarantee greater protection for the shareholders that make up the company and that make the system for transferring company shares more restrictive, or the capitalistic component, typical of Public Limited Companies, which requires less formalism in the case of new investors.
2. The transparency, with limited liability companies being assigned to the administrative body, which makes it necessary to hire independent experts for a wide variety of matters, (as is the case of the public limited companies).
3. The company’s capital, undoubtedly in connection with the turnover expected of the company, with the minimum share capital for limited liability companies being Euro 3. 000, and of Euro 60,000 for Public Limited Companies.

Once we have decided on one or the other option, the next step will be to apply for a company name, for which we will have to go to the Central Mercantile Registry so that it can, after checking the required company name, issue us with the corresponding Negative Certificate of Company Name.

With the corresponding certificate, the next step is to draw up the Company’s Articles of Association, a document that contains the provisions that will regulate the transcendental decisions of the company’s day-to-day business, starting with the way in which the company decisions are adopted, or even, determining the system and transfer of the company’s shares or holdings.

Once the two previous steps have been successfully completed, and with the company name correctly registered, we can start the operational activities related to the opening of a current account in the name of the company and to obtain the provisional NIF of the company.

With all the previous documents, we will be ready to go to the Notary of free election and to grant the corresponding deed of incorporation.

Finally, once the public deed has been granted, it must be registered in the Mercantile Registry of the company’s registered office as stated in the previously drafted Articles of Association (after the settlement of Form 600).

Once our deed has been registered, there are certain formalities of a tax nature that must be completed in order to complete the necessary formalities in the process of starting the company’s activity. In this sense, the company must request the definitive NIF, register for the Economic Activities Tax and request a digital certificate.

If the administrator or any of the partners is not a Spanish national, he will need the corresponding NIE, or Foreigners Identification Number, when proposing to carry out an economic activity in Spain.

Special requirements to set up an online company

Given that an ecommerce is still a company, the procedures to be followed will be identical to those expressed above, although, taking into account that it will be necessary to have a web page (previously approved by the General Board) and to have the corresponding means of payment.

The most important legal aspects to be taken into account

A growing trend in the world of company formation is the idea of entrepreneurs that they do not need legal advice of any kind, something that may end up taking its toll.

In accordance with the above, as experts in commercial law we always recommend the prior analysis of the client’s needs in order to determine which type of company best meets their own needs, or even to determine whether the most appropriate solution is to register as a self-employed person, taking into account the volume of annual income.

On the other hand, a drafting of the Articles of Association supervised by a lawyer is absolutely necessary, in order to agree on the optimum provisions and structures of the company, taking into account the needs of the entrepreneur.

Finally, and despite the fact that this is a subject that has already been studied in other articles, at LETSLAW we stress the importance of having a shareholders’ agreement that regulates the relationship between the shareholders of a company and between them and the company.

LETSLAW

At Letslaw we have professional experts in the constitution of national and international companies, who will be able to assist you in the earliest stages of your entrepreneurial adventure.