Opening an S.L. (Limited Liability Company) in Spain

The term Sociedad de Responsabilidad Limitada directly refers to limited liability. Commonly referred to as Sociedad Limitada or S.L., this business structure offers one key advantage: limited liability similar to an LLC. Company debts do not affect the personal assets of the owners, making it a safer choice for entrepreneurs.

However, full protection is only granted if all legal requirements are properly met during registration. Founders and co-founders must also fulfill their management duties diligently.

Most common reasons include quick formalization of business activities, attracting both domestic and foreign investment, protecting intellectual and industrial property rights.

In addition to the main advantage — limited liability up to the amount of the share capital — the following benefits are often highlighted:

• Can be registered by both residents and non-residents of Spain;
• Suitable for small and medium-sized businesses;
• Share capital contributions do not have to be made in cash;
• Each founder has the right to attend general meetings and vote on all matters, regardless of their share size;
• Company shares can be sold, inherited, or gifted — with prior notification to other shareholders, who have pre-emptive rights to acquire the share and must give their consent.

A company can be founded by a single person. In that case, the legal form includes the term Unipersonal, meaning «sole-owned», and the abbreviation becomes S.L.U.

The articles of association must include the following:

• Full and abbreviated company name with its legal form;
• Business purpose and scope of activity;
• Date the company begins operations;
• Registered office address;
• Amount of share capital;
• Percentage share of each founder;
• Governance structure;
• Procedures for convening meetings and making decisions;
• Terms for restructuring and dissolving the company.

The minimum share capital required is €3,000. However, the parties can agree not to deposit the full amount immediately. Contributions cannot be publicly traded — this is a key difference from joint-stock companies.

If the contribution is made entirely in cash, the amount must be deposited into a company bank account prior to notarizing the founding documents.

Non-cash contributions are also permitted and must be valued in monetary terms. Acceptable forms include:

• Residential and commercial real estate;
• Land plots;
• Securities;
• Vehicles (cars, yachts, etc.);
• Office equipment, machinery, industrial or production systems.

All non-cash contributions must be recorded in the articles of association, including object descriptions, any registration details, and monetary valuation.

Note: Official appraisal is not required by law, but the founder is personally liable — up to the value of their contribution — to both the company and its creditors. Therefore, it is strongly advised to choose contributions responsibly. For expert advice, contact our specialist.

Once registered, the share capital can be fully used to support business operations — for purchasing equipment, paying employee salaries, covering taxes, and other needs.

If additional funding is required, it can be injected either by Increasing share capital — requires amending the articles of association; or founders’ loans to the company — must be recorded in the accounting system and repaid with applicable taxes.

All legal steps must be followed strictly. It’s not possible to open an S.L. in 2–3 days. Realistically, the full process takes around one month. Skipping any step may result in legal or financial risks and reputational loss. Proper documentation helps protect founders and ensure long-term business success.

Before registering the company, you must:

• Obtain a Foreigner Identity Card (Tarjeta de Identidad de Extranjero, TIE);
• (Note: While TIE is not required for opening an S.L., it is necessary to work in Spain.)
• Obtain a Foreigner Identification Number (Número de Identidad de Extranjero, NIE) — a unique personal tax and ID number for both residents and non-residents; Provide a valid Spanish address — for legal, physical, and postal purposes;
• Get a Spanish phone number and email address — for communication with banks and public authorities;
• Propose five unique company name options for registration.