Sociedad Limitada (SL)

Minimum capital

Since 2023, you can establish an SL with just 1 euro of share capital through the new SL Express (Sociedad Limitada de Formación Sucesiva). The traditional minimum was 3,000 euro. With the 1 euro option, you must retain 20% of annual profits until the capital reaches 3,000 euro. Most founders still contribute 3,000 euro to avoid this restriction.

SL versus autónomo

As an autónomo, you are personally liable for all business debts with your personal assets. With an SL, your liability is limited to the company's assets. The SL pays corporate tax (Impuesto de Sociedades) at 25% (or 15% for the first two profitable years for new companies). As the owner, you pay yourself a salary and deduct it as a company expense. The administrative burden is heavier: annual accounts must be filed at the Registro Mercantil, you need a gestor or asesor fiscal for ongoing compliance, and the SL has its own separate Seguridad Social obligations for its administrators.

When an SL makes sense

An SL typically makes sense when your annual revenue exceeds 40,000 to 50,000 euro, when you want to limit personal liability, when you have partners, when you want to reinvest profits at a lower tax rate, or when the professional image of a company matters for your clients. Below those thresholds, the autónomo structure is usually simpler and cheaper.

Formation

Forming an SL requires: obtaining a company name certificate from the Registro Mercantil Central, drafting the articles of association, signing the escritura de constitución before a notary, obtaining the CIF from the Agencia Tributaria, and registering at the Registro Mercantil. The process takes 2 to 4 weeks through a notary, or faster through the CIRCE system (online creation).