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4. Main Characteristics of Corporations and Limited Liability Companies

4.1 Main differences between corporations and limited liability companies

The main differences between S.A.s and S.L.s are as follows:

 S.A.S.L.
Minimum capital stock€60,000.€3,000 2.
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 required3. The value stated in the deed recording the contribution may in no case be higher than the valuation performed by the expert.

In the case of monetary contributions, their actual existence must be evidenced to the authorizing notary by means of a certificate of deposit at the credit institution of the corresponding amounts in the name of the company or entity.
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 can be issued.They are not marketable securities. Debentures and other securities 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, spouse, 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 (in any event, it must be in Spain). 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 by laws.Different majorities are established depending on the content of the resolutions. These can be increased by the by laws.
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 can be issued and guaranteed.Bond issues can be used as a way of raising funds, although such issues cannot, in total, amount to more than twice the company’s equity, unless the issue is secured by a mortgage, a pledge of securities, a government guarantee or a joint and several guarantee provided by a credit institution.

If the issue is secured by a joint and several guarantee provided by a mutual guarantee society, the limit and other terms of the guarantee will depend on the guarantee capacity of such society at the time of providing it, in accordance with the specific rules applicable to it.

Bonds convertible into S.L. shares can be neither issued nor guaranteed.

2Except in the case of the entrepreneurial limited liability company, the rules for which are described in section 4.2 below.

3The expert report is not required, but the substitute report from the directors is required in the following cases:
a) 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.
b) 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.
c) 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.
d) 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.
e) 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.