Question from Jon, What is the difference between a Sociedad Limitada (SL) and Autónomo in Spain?
Answer from AI:
In Spain, when starting a business, you have the option to register as a Sociedad Limitada (SL), which is similar to a Limited Liability Company (LLC) in other jurisdictions, or as an Autónomo, which is equivalent to a sole proprietorship or self-employed individual. The choice between the two depends on various factors such as the nature of your business, your financial situation, and your personal preferences.
Sociedad Limitada (SL)
A Sociedad Limitada (SL) is a type of business entity in Spain that offers limited liability to its owners. This means that the owners’ personal assets are generally protected if the company incurs debts or liabilities.
Key features of an SL include:
- Minimum share capital of €3,000 is required to start an SL.
- The liability of the shareholders is limited to their capital contribution.
- It requires more formalities such as the creation of a deed of incorporation, registration in the Mercantile Registry, and the need for an annual audit if certain thresholds are exceeded.
An Autónomo, on the other hand, is a self-employed individual who operates a business as a sole proprietor.
Key features of an Autónomo include:
- No minimum capital is required to start.
- The individual is personally liable for all business debts and liabilities.
- It involves fewer formalities and lower start-up costs compared to an SL.
Choosing between SL and Autónomo
The choice between operating as an SL or an Autónomo depends on various factors. If you plan to run a small business with low risks and want to avoid the formalities and costs associated with an SL, then operating as an Autónomo might be a good option. However, if you plan to run a larger business with higher risks and want to protect your personal assets, then forming an SL might be a better choice.
It’s important to note that this is a general explanation and the specifics of your situation could lead to different conclusions. Therefore, it’s recommended to consult with a legal professional for personalized advice.