What is a limited society

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When it comes to creating a company, there are many company alternatives to select from. However, there is one that stands out from the rest. We are talking about the Limited Liability Company, also known as the Limited Company. In Spain it is one of the most chosen together with the Sociedad Anónima. But what does this refer to?

If you are interested in knowing What is a limited society, what are its characteristics, advantages, disadvantages and more information about it, keep reading because we present it below.

What is a limited society

If you want to know what a limited company is, you should know that this SL, or SRL, the acronym by which it is recognized, is a commercial company. It is mainly focused on SMEs, that is, small and medium-sized companies (or entrepreneurs) and with it they can develop their business activity without their assets or savings coming into play. Nor do they have to ask for a loan to create it.

Each person who is part of the limited company contributes money x to the capital, and it is for that money that it contributes that limits the responsibility before third parties. As an example, imagine that you are three in society and that each one puts 1000 euros. The final capital of the company would be 3,000 euros. But, if something happens and you have to compensate a third party, with an example of 3000 euros, it does not mean that a single partner should put that money, but that he will only put what he has put in the capital, in this circumstance 1000 euros.

At the same time of contributing capital, all partners receive social shares in exchange, which are indivisible and accumulative, but set aside the individual assets of each person.

Characteristics of the limited company

Now that you understand what a limited company is, for you to understand it perfectly, you must know what characterizes it, that is, the requirements that are required to be able to create it. And these are:

• Number of partners. Hace falta que la sociedad limitada tenga al menos un socio, pero no hay un máximo requerido, es decir, pueden haber tantos como quieran. Al mismo tiempo, puede ser una compañía con personsLas personas son personalidades imaginarias que representan a un determinado grupo objetivo. En el marketing online, las personas ayudan a entender mejor a los usuarios de un portal web o a los clientes de una tienda online. Concepto de personas Para que las personas puedan ejercer su efecto positivo, deben ser lo más detalladas viable. Esto conlleva un término exhaustiva de los grupos destinatarios para conseguir datos empíricos. La próxima plus físicas o jurídicas. Estos socios pueden ser empleados (que aportan su trabajo a la sociedad) o capitalistas (que ponen el dinero).
• Responsibility. As we have previously explained, the responsibility of the partners is limited to the capital contributed, in such a way that they will not respond to debts or problems that arise with anything else, and much less with their personal assets (because it is exempt).
• Social denomination. In this case, the limited company must be registered in the Central Mercantile Registry and, in its name, the Limited Liability Company must appear, or in its case SRL or SL
• Social capital. The minimum to create a limited company is a capital of 3,000 euros. There is no maximum to put. This money does not have to be only monetary, but can be in kind, as an example with the company's furniture. In turn, for the capital that is contributed, social shares will be obtained that have legal limitations and that will be based on the capital that is contributed (who gives more, receives more shares).
• Incorporation of the limited company. This, at the same time of registration, must have statutes and a public deed that must be signed before a notary public, and also presented to the Mercantile Registry. In these papers the number of contributions from each partner and the percentage of capital stock they have placed must remain clear. In addition, it must be established which are the management and direction bodies, that is, if there is a single administrator (and who he is), the joint administrators, the joint administrators or the Board of Directors.

Advantages of a limited partnership

It is clear that the The limitation of liability based on the capital contributed is one of the great advantages of what a corporation is (compared to other companies or employment figures). But it is not the only advantage it offers us. There is more:

• It is easy to create. It does not have as many bureaucratic procedures as others.
• Callable capital is relatively low. At the same time, the fact of being able to contribute it both in money and in goods or species helps to make it easier to obtain. And even when you have to add the incorporation costs, which can be between 600 and 1000 euros, it is completely affordable.
• It doesn't take more than one person to create it.
• It facilitates access to loans and credits in banks, because they see it as a better "match" compared to individuals or the self-employed.

Disadvantages of a limited partnership

However, even when everything seems fine, the truth is that there are some aspects that can slow you down when creating it. As an example:

• The fact that units are not transferableIn other words, they cannot be passed on to someone else or sold. The only people you could sell to are the members of that association, but not to someone outside.
• There is a period more or less time (40 days) for the incorporation of the Limited Company to be completed, therefore when it requires the procedure to be fast, it is not the figure that is chosen.
• In the moment of apply for a credit or loan, many banks require "personal guarantees", something that goes against the characteristics of the corporation, so in the end, if you accept, the whole essence of it disappears because you have already involved your assets.

What taxes must be paid when creating an SL

When creating an SL you must know in addition to the taxes that must be paid with it. And it is not as simple as a freelance. For this case, you must be up to date with:

• The corporation tax (IS). It is paid by all companies in Spain and entails that the 25% of the net profit obtained in a year must be paid.
• The personal income tax (IRPF). Only in case you have hired employees, or you outsource services to freelancers.
• The value added tax (VAT). Something usual, since when presenting an invoice, except in specific cases, you must collect VAT and collect it to later pay it to the Treasury.
• The tax on economic activities (IAE). Only for companies that invoice more than one million euros.
• Other taxes. That of a community, rent, IBI ...