Formas Jurídicas de Empresas

• When an entrepreneur decides to create a company, they must adopt one of the legally established legal forms.
• These forms represent the modality that a professional or company chooses to carry out its activity.

Legal Forms

• The different legal forms are the types of companies that the Administration foresees can be constituted based on the number of partners, the type of responsibility, and the capital stock contributed.
• The choice of legal form on the part of the promoter of the business idea must be the object of a rigorous study whose purpose is to determine the type that best suits the characteristics and needs of the project.
• Different legal forms imply different types of responsibility and the choice of one or another can affect the particular assets of the entrepreneur or the partners when it comes to a company.
• There is another criterion when choosing the legal form, such as possible access to public aid from the European Union, the Spanish State, and each autonomous community.

Criteria for Choosing a Legal Form

• A series of general criteria should be taken into account when making this choice.
• The criteria include constitution and management; number of partners; capital stock; taxation; and patrimonial responsibility.

Complexity of Constitution and Management

• It is important to take into account that certain activities have regulations that predetermine a specific legal form.
• The economic costs of constitution should also be valued.

Number of Partners

• The number of partners who participate in the project is an important aspect to take into account when choosing the legal form.
• If it is a single person, the usual thing is to choose the legal form of individual entrepreneur but could choose another corporate formula, such as the limited liability company.
• If there are several partners, it is only possible to form a company.
• The legal formula is conditioned by the minimum and maximum number of partners that the law establishes for each company.

Economic needs of the project

• The economic size of the project may require a certain level of investment.
• Certain types of company require the availability of a minimum capital to be constituted as a company.
• The capital stock is the contribution of money, goods, or work made by the partners to the company.
• The law establishes a minimum capital stock for some of the legal forms.

Fiscal Aspects

• Each legal form is subject to a different taxation regime.
• Two main groups can be differentiated: those subject to personal income tax (IRPF) in its different modalities and those subject to corporate income tax (IS).
• The tax rate is different in each case.

Patrimonial responsibility of the promoters

• The responsibility that promoters have towards the Administration, clients, suppliers, workers, and banks is another fundamental factor that must be taken into account.
• The patrimonial responsibility is the obligation on the part of the promoters to respond to the debts generated by the business activity.
• There are two types of patrimonial responsibility: limited and unlimited.

Other Aspects

• Freedom of action of the entrepreneur, the image of the company, and access to public aid.

Individual legal forms and collectives without legal personality

• In some situations, companies do not have their own legal personality, but rather it is the same as that of their owner who is personally responsible for all the obligations that the company incurs.
• The communities of property and civil societies are in this same situation as the individual entrepreneur.

Individual Entrepreneur

• The individual entrepreneur is the natural person who carries out, in their own name and through a company, a commercial, industrial, or professional activity.
• Individual entrepreneurs can be self-employed workers or entrepreneurs of limited liability.
• Legally, an individual entrepreneur has the following characteristics: is of legal age, carries out a business activity in a habitual way, the business activity is carried out in their own name, and has unlimited patrimonial responsibility.

Self-Employed Worker

• The self-employed worker is an individual entrepreneur who has a special contribution regime to Social Security.
• A self-employed worker or self-employed person is defined as someone who, in a habitual, personal, and direct way, carries out an economic activity for lucrative purposes, without being subject to a contract, regardless of whether or not they use paid services from third-parties.
• To be self-employed: be of legal age and have the free disposition of their assets, be emancipated minors, and unemancipated minors and the incapacitated through their legal representatives.
• Their main characteristics are: the relationship with their clients is not subject to any employment contract; they have the obligation to register in the Special Regime for Self-Employed Workers (RETA) of Social Security; they are subject to the obligations of an individual entrepreneur; they have a direct estimation or objective estimation regime in terms of IRPF.

Entrepreneur of limited liability

• The entrepreneur of limited liability is a variant of the self-employed worker.
• The entrepreneur of limited liability is the natural person who, with limitation of liability under certain conditions, performs in a habitual, personal, direct way, on their own account and outside the scope of direction and organization of another person an economic or professional activity for profit.
• An self-employed worker is defined as someone who is registered under the Self-Employed regime.
• They can limit their responsibility; must register in the Mercantile Registry (Registro Mercantil); must have total control of the company; the contribution of capital to the company is limited to the will of the entrepreneur.

Community of Goods

• A community of goods (C. B.) is a private contract for a property or right belongs proindivisibly to several people called partners.
• The community of goods has the following characteristics: indivisibility of the goods, plurality of the owners, the minimum number of partners is two, they have unlimited liability, and there is no minimum capital stock for its constitution.
• As for its tax regime, the community as such is the one that must register in the IAE, not each of its members.
• Not having legal personality, the company does not pay IS, but each partner must do so (IRPF).
• In relation to its labor regime, workers employed by a community of property must register with Social Security in the general regime, not like the partners.

Civil Society

• A civil society is one by which two or more people undertake to put in common money, goods or industry with the aim of sharing among themselves the profits that arise from the business they establish together.
• Civil society will have its own legal personality when it is constituted by public document before a notary, in which case it will take the form of a company.
• Civil companies pay IS, the corporation tax, when they have a commercial target.

Taxation of Companies

• The tax on the income of individuals with habitual residence in Spain is personal and subjective, burdens the income of individuals in general.
• It is a progressive tax: the higher the taxable amount, the higher the proportion that will be paid.

Income Tax

• The income that is taxed with the IRPF is: income from work, income from movable capital, income from the capital, profits for economic activities, capital gains and losses, and imputations of legally established income.

The financial assessment of companies Individual. IRPF

• Tax on the income of individuals (IRPF) taxes the income of individuals with habitual residence in Spain.
• A taxpayer must make the payments that are made and present the documents to which they are bound within the corresponding time frame.

Individual Company Taxation. The IRPF

• Is to determine and tax the yearly profits of business persons, professionals and artists that may not be constituted as a corporation (Sociedad Anonima or Sociedad Limitada for instance).
• The first step in determining the taxable income is to find the difference between the firm's income and deductible expenses.

Corporate Income Tax (IS)

• The corporate income tax regime is regulated as a specialty of the LSC.

Limited Company

• A limited liability company (S. L.) is a commercial company composed of one or more partners whose capital is composed of shares of equal value, which are cumulative and indivisible and are called shares of participation.
• The minimum capital required for its establishment is €3,000.
• The legal form admits one and no maximum number of partners.
• The responsibility of the partners is limited to the amount of their share.
• To constitute an S. L. public deed and registered in the Mercantile Registry.

Organs of government

• The organs of government by which a limited liability company is governed are: general meeting of partners and sole administrator.

New Limited Company

• The new limited company (S. L. N. E.) regulates as a specialty of the S. L. It is simpler and the time of constitution is shorter.
• The S. L. N. E. is regulated as a specialty by the Law on Capital Companies.
• The characteristics are : the capital stock may not be less than €3000 or more than €120,000; there is no minimum number of partners; the maximum number of founding partners is limited to five, and only natural persons can be founding partners; the liability of the partners is limited to the capital contributed; the organs of government, the shareholders' meeting functions.

Successive Formation of a Limited Company

• The successive formation of a limited company (S. L. F. S.) is a type of company that is governed in an identical way to the S. L. It is a company type that will become S. L. once it has been contributed, voluntarily and gradually, the minimum social capital established for this type of company.

Public Limited Company

• A public limited company is one in which only investors, the shareholders, bear the risk of the business.
• The main characteristic of the company is that the shareholder is only answerable for the amount of capital that they have invested and not for the debt of the company.
• To calculate the capital stock, the number of total actions is multipled by the nominal value of each share
• Its share capital can be increased through the issue of new shares to the public or to existing shareholders.

Work Companies

• Work companies are S. A. or S. L. whose share capital is mostly owned by the workers, who provide their services in them in a direct and personal way, full-time and indefinitely.

Cooperative Societies

• Cooperative societies are formed by partners who come together to solve their economic and social needs in common.
• A cooperative society (S. Coop.) is constituted by a group of people, either natural or legal, who associate in a regime of free adhesion and voluntary withdrawal.
• The capital is variable; the members are never personally responsible for the corporation's obligations.

Associated labor cooperatives

• Associated labor cooperatives in that working as a member is integral to being a member in the co op.
• In an associated labor cooperative are: workers in the company, collaborating members, and independent contractors.

Other Taxes

• There is another group of minor taxes of a local nature, that is, that correspond to the municipalities and autonomous communities.
• The most important are the following: property tax (IBI); tax on motor vehicles; tax on constructions, installations and works.

Economic Activities Tax

• The tax on economic activities (IAE) directly taxes the performance of an economic activity by legal persons.
• During the first two years, the company is exempt from payment, and from the third year, it is obliged to pay the tax.

Value Added Tax

• The value added tax (VAT) taxes consumption and falls on the final consumer.

General scheme

• This scheme is applicable when none of the special schemes is applicable.
• Tax that a company has supported is deducted from the accrued tax.

Special regimes

• Special arrangements refers to schemes of easier administration for small and medium businesspersons.