Corporate Law at Spain
Corporate law in Spain is governed by a combination of national legislation, European Union regulations, and regulatory bodies. Here's a structured overview of the key aspects of corporate law in Spain:
📚 Legal Framework
Primary Legislation:
Spanish Companies Act (Ley de Sociedades de Capital, LSC) – Main legal source governing capital companies like S.A. (Sociedad Anónima) and S.L. (Sociedad Limitada).
Commercial Code (Código de Comercio) – Contains general commercial regulations.
Civil Code (Código Civil) – Applies where corporate and commercial laws are silent.
Other Relevant Laws:
Law on Structural Modifications of Companies (Ley 3/2009)
Insolvency Law (Recast Law 1/2020)
Securities Market Law for public companies
Regulatory Bodies:
Mercantile Registries (Registros Mercantiles) – Handle registration and disclosure.
Spanish Securities Market Commission (CNMV) – Oversees listed companies.
Tax Agency (AEAT) – For corporate tax compliance.
🏢 Types of Business Entities
Sociedad Anónima (S.A.):
Suitable for large enterprises
Minimum share capital: €60,000
Shares can be listed on stock exchanges
Sociedad Limitada (S.L.):
Most common for SMEs
Minimum share capital: €3,000
Not listed on stock exchanges
Other forms include:
Sociedad Civil (partnership)
Sociedad Comanditaria (limited partnership)
Branch office (sucursal) for foreign companies
📑 Company Formation
Steps to incorporate a company:
Name Clearance: Apply for a unique name certificate from the Mercantile Registry.
Draft Articles of Association: Detailing company’s bylaws.
Open Bank Account: Deposit minimum share capital.
Notarize Public Deed: Executed before a public notary.
Register with Mercantile Registry: Company acquires legal personality.
Tax Identification Number (CIF) and register with tax authorities.
⚖️ Corporate Governance
Governing bodies:
General Shareholders’ Meeting
Board of Directors or Sole Administrator
Duties of directors:
Duty of loyalty and care
Liability for breach of duty, wrongful trading, etc.
Annual financial statements must be approved and filed with the Mercantile Registry.
📊 Accounting & Reporting
Spanish GAAP (PGC) or IFRS (for listed companies)
Annual accounts include balance sheet, profit and loss account, statement of changes in equity, cash flow statement, and notes.
📎 Corporate Taxation
Corporate Income Tax: Generally 25%
Reduced rate (15%) for new companies for the first two years of profit
Other taxes: VAT (IVA), Transfer Tax, Local Business Tax (IAE)
📌 Recent Trends & Reforms
Push for digital incorporation of companies
More transparency and corporate governance reforms
Implementation of EU directives on cross-border conversions, mergers, and divisions
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