Differences between S.L. and S.A. in Spain

Choosing the right legal structure is a key decision when setting up a business in Spain. Among the various options available, two popular choices stand out: S.L. (Sociedad de Responsabilidad Limitada) and S.A. (Sociedad Anónima). These acronyms may seem like mere bureaucratic distinctions, but they represent different legal corporate entities in Spain, with unique characteristics that can have a significant impact on how a business operates.

In this blog post, we look at the differences between S.L. and S.A. in Spain.

What is S.L. (Limited Liability Company)?

  • The S.L. is the most common and suitable company for SMEs, companies with very few partners and for family-run businesses.
  • Minimum share capital of 3,000 euros fully paid.
  • The Entrepreneurial Limited Liability company can be formed with less than 3,000 euros of share capital.
  • An S.L. can consist of one person.
  • Partner liability is limited to the capital contributed.
  • Set-up is faster. To streamline the establishment of of new companies, the process can generally be done online.
  • An S.L. is essentially a close company
    • Share capital divided into shares, which cannot be incorporated into negotiable securities.
    • The shares cannot be freely transferred.
  • More flexible management and legal system than an S.A.
  • Must file with the Mercantile Registry.
  • Liable for Corporate Tax (25% general rate) although the average effective rate is lower (22%).

What is S.A. (Public Limited Company)?

  • The S.A. is intended for companies of a certain size or where partner rotation is expected.
  • Listed companies must be public limited companies.
  • Minimum capital stock of 60,000 euros. Minimum initial payment of 25%.
  • An S.A. can consist of one person.
  • Partner liability is limited to the capital contributed
  • S.A. is basically an open company
    • Capital stock divided into shares, as securities.
    • The shares are freely transferable, unless otherwise defined in the company bylaws.
  • More complicated management and legal system than a S.L.
  • Must file with the Mercantile Registry.
  • Liable for Corporate Tax (25% general rate) although the average effective rate is lower (22%).

Source: ICEX Spain

If you need help choosing the ideal type of company for your business, we are here to help you. Simply send us an e-mail with your expectations, and our team of business lawyers will advise you.

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