The incorporation of commercial companies is an essential step in the business world. The legislation establishes the requirements and procedures that are necessary for the incorporated entity to have a legal personality.
For this reason, understanding the regulations and the procedures to be followed is essential to get a business off to a good start and operating in the market with complete security.
Efforts have now been made to simplify all the bureaucracy and requirements for a company formation. Even so, the procedure remains complex for those who have never set up a legal entity before, and it does not hurt to have a little extra advice in this area.
What are partnerships and why are they important?
Commercial companies are legal entities created by the will of their partners or participants, and their respective contributions of capital or assets, to achieve a common objective, which in most cases is to carry out an economic activity.
The importance of this type of entity lies in the fact that thanks to its associative nature, it is easier to obtain the money needed for the company to grow and achieve its objectives.
In addition, the personal assets of the partners are fully protected and they are not liable for the debts that the company incurs in the course of its business, which makes it possible to carry out the business activity with greater security.
Types of companies
The types of commercial companies that can be found are as follows:
- Limited company: can be established by a single person and has a minimum share capital of 3,000 euros. With the passing of Law 18/2022 of 28 September (which came into force on 19-10-2022), also known as the Crea y Crece Law, it is possible to set up a limited company with a minimum share capital of 1 euro, subject to a number of conditions.
- Public limited company: its capital is divided into shares and the minimum is €60,000.
- General partnership: there is no minimum amount of share capital, the partners contribute work and capital.
- Limited partnership: it has general partners with unlimited liability, and limited partners with liability limited to the capital contributed.
- Worker-owned company: the majority of its capital must be in the hands of its workers.
- Cooperative society: it is part of the social economy and its ownership belongs to its workers.
Why is it important to incorporate a company?
Since in most cases, the liability of the partners is limited, their personal assets are protected. In addition, a legal entity has easier access to credit lines and other forms of financing.
On the other hand, a partnership allows the entry of new investment partners at any time, which leads to increases in share capital.
Formalities for incorporating a company in Barcelona
Choice of legal form
The first decision to be made is to choose the legal form that the entity will have. To do this, it is necessary to find out very well about the characteristics of each of the companies regulated in the Commercial Code and to analyse their advantages and disadvantages for the partners.
The choice of one form or another depends very much on the type of activity to be carried out.
Name reservation
One company cannot have the same name as another. To ensure that nobody appropriates the name that has been chosen, a reservation of the company name is made through the Central Register of Companies (Registro Mercantil Central).
Drafting of the statutes
The articles of association are the rules governing the establishment and operation of the entity to be set up. They establish important issues such as the rights and obligations of the shareholders, and define the internal control bodies and the powers of the board of directors and the administrative body.
It is not possible to set up a company without the articles of association, so they must be ready at the time of going to the notary to execute the public deed of incorporation.
Entry in the Commercial Register
In order to acquire legal personality, and for all the effects deriving from this status to be deployed, the company must be registered in the Commercial Register to give public knowledge of its existence.
Tax obligations of companies
Taxes payable by a company
These entities must declare VAT, corporate income tax, personal income tax withholdings and business tax (IAE) if they have a turnover of more than one million euros per year, although they are exempt from this tax for the first two years after incorporation.
Accounting and tax obligations
These entities are obliged to relate electronically with the Administration, as they must keep and legalise the corporate books, consisting of the minutes book, the members’ register book and the contracts register book.
In addition, accounting books must be kept, which include the inventory and annual accounts book, the journal and the VAT register book.
Barcelona Chamber of Commerce
It is interesting for companies to register with the Barcelona Chamber of Commerce in order to take part in its activities and to be able to access different types of aid. This can be done through the Chamber’s website.
Agencia Tributaria
Before starting the activity, it is necessary to register with the tax authorities by means of Form 036 and to register with the IAE under the corresponding epigraph.
Commercial Register
Companies must file their accounts annually with the Commercial Register (Registro Mercantil).
Conclusion: assessing risks and opportunities
When setting up a commercial company, it is necessary to assess the risks and opportunities involved. On this basis, and based on the activity to be carried out, it will not be difficult to find the legal entity model that best suits the needs of future partners.
Please contact our tax advisors in Barcelona regarding this topic.
