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4. Formation of a company

The most common forms of legal entity under Spanish corporate law are the corporation (Sociedad Anónima - S.A.), and the limited liability company (Sociedad Limitada -S.L.) (other corporate forms are described in Appendix I, section 2 of this Guide).The main differences between S.A.s and S.L.s are as follows:

 S.A.S.L.
Minimum capital stock€60,000€3,00011
Payment upon formation At least 25% and any share premium.Payment in full.
ContributionsA report from an independent expert on any non-monetary contributions is required12.No report from an independent expert on non-monetary contributions is required, although the founders and shareholders are jointly and severally liable for the authenticity of any non-monetary contributions made.
SharesThey are marketable securities. Debentures and other securities that recognize or create a debt, even bonds convertible into shares, can be issued.They are not marketable securities. Debentures and other securities that recognize or create a debt can be issued.
Transfer of shares Depends on how they are represented (share certificates, book entries, etc.) and on their nature (registered or bearer shares).
In principle, they may be freely transferred, unless the bylaws provide otherwise.
Must be recorded in a public document.
S.L. shares are generally not freely transferable (unless acquired by other shareholders, ascendants, descendants or companies within the same group). In fact, unless otherwise provided in the bylaws, the law establishes a pre-emptive acquisition right in favor of the other shareholders or the company itself in the event of a transfer of the shares to persons other than those referred to above.
Amendments to the bylawsThe directors or shareholders, as the case may be, making the proposal must make a report. No report is required.
Venue for shareholders’ meetingsAs indicated in the bylaws. Otherwise, in the municipality where the company has its registered office.
Attendance and majorities at shareholders’ meetingsDifferent quorums and majorities are established for meetings on first and second call and depending on the content of the resolutions. These can be increased by the bylaws.Different majorities are established depending on the content of the resolutions. These can be increased by the bylaws.
Right to attend shareholders’ meetingsA minimum number of shares may be required to attend the shareholders’ meeting.This right cannot be restricted.
Number of members of the board of directorsMinimum: 3.
No maximum limit.
Minimum: 3.
A maximum of 12 members.
Term of the office of directorMaximum 6 years (4 years at listed companies). They may be reelected for periods of the same maximum duration.May be indefinite.
Issue of bondsBond issues may be used as a means to raise funds. Bonds convertible into shares may be issued or guaranteed.Bond issues may be used as a means to raise funds, although the total amount of the issues may not be higher than twice the company’s equity, unless the issue is secured by a mortgage, by a pledge of securities, by a government guarantee or by a joint and several guarantee from a credit institution.
If the issue is secured by a joint and several guarantee from a mutual guarantee society, the limit and other conditions of the guarantee will be determined by the guarantee capacity of the society at the time of providing it, in accordance with its specific legislation.
Bonds convertible into shares cannot be issued or guaranteed.

Any foreign citizen or legal entity may freely be a shareholder of a Spanish company provided that he/she/it applies for a N.I.E. or N.I.F. as described in this Chapter.

In addition, any foreign citizen or legal entity may also be a director of a Spanish company, with the same requirement to apply for a N.I.E. or N.I.F.13 and, where shares are held in the company and/or compensation is received for services as a director, it will be necessary to register for social security purposes14 and therefore be a legal resident in Spain.

11Except in the case of the entrepreneurial limited liability company, the rules for which are described in section 4.2 of Annex I.

12The expert report is not required, but the substitute report from the directors is required in the following cases:

  1. Contribution of transferable securities that are listed on an official secondary market or on another regulated market or in money market instruments, in which case they will be valued at the weighted average price on one or more regulated markets in the last quarter preceding the date on which the contribution was actually made, with the certificate issued by the relevant governing company.
  2. Contribution of assets other than those indicated in letter a) above the fair value of which has been determined, within the 6 months preceding the date on which the contribution was actually made, by an independent expert not appointed by the parties.
  3. Where in the formation of a new company by merger or spin-off a report has been prepared by an independent expert on the merger or spin-off plan.
  4. Where the increase in share capital is carried out to deliver the new S.A. or S.L. shares to the shareholders of the absorbed or spun-off company and a report has been prepared by an independent expert on the merger or spin-off plan.
  5. Where the increase in share capital is carried out to deliver the new S.A. shares to the shareholders of the company that is the target of a tender offer.

13Directorate-General of Registries and the Notarial Profession of January 18, 2012.

14Articles 136 and 305 of Legislative Royal Decree 8/2015, of October 30, 2015, approving the revised General Social Security Law.