How to set up a limited company in Palma

Our team of accountants in Mallorca can help you in setting up a limited liability company in Spain. If you are foreign investor, you can save a lot of time and money by hiring the best accounting professionals in Palma. Particularly, since the process of setting up a company in Palma, requires a detailed, in-depth knowledge of national Law and business regulations.

What do I need to set up a limited liability company?

The reason for SL being so popular lies on the fact the Spanish Administration only asks you for a 3,000 € minimum share capital, an amount which can be deposited either in cash or by means of non-monetary contributions such as: credit rights, machinery, real estate property, etc. The capital is divided into shares, but the transfer of these shares is limited to the company partners as the transfer is only possible among existing partners. Any doubt about it? Our team of experts in company registration in Palma can help you, regardless of the kind of project you have in mind.

Shares cannot be sold to third-parties, but it is possible to transfer them to individuals or specific entities within the company, like company partner or close family members. They can also be transferred to other companies within the SL, as long as it belongs to a group of companies.

It is possible to start up a company in Palma even with just one shareholder. Under Spanish law, a SL can have an unlimited number of partners being the starting point the one-shareholder company. Founders and partners of a SL company in Palma can be nationals of any country. Shareholders liability for company’s debts is limited to their company’s share capital contribution. Do not hesitate to contact our accountants in Palma to set up a company in Mallorca

What else I do need to set up a Spanish SL?

The SL or limited liability companies in Spain must have a legal name where it shows its “sociedad limitada” (SL or SRL) status. All SL must submit for registration the necessary legal at the Companies House in Palma. In this procedure, investors must draw the company’s articles of association, with the assistance of a public notary in Palma. To cut the hustle, we strongly advise you to rely on our expertise in tax in Palma and company registration in Mallorca.

A company start up in Mallorca requires:

• A unique trading name in Spain and a CIF (código de identificación fiscal), the tax identification number. This code will be provided by the Agencia Tributaria, also called Hacienda, which is the Tax Office in Mallorca and the rest of Spain. tax authorities must be notified on operations starting date within 30 days from the commencement of business activity.
• The opening of a corporate bank account at a local bank in Spain, in which share capital will be deposited.
• If you need to hire in Mallorca, you must know that employees should be first registered at the Seguridad Social (Social Security), which is the Labour Authority in the country. Our team of labor and payroll in Palma can assist you with that proceeding.

How long does it take to register a Spanish SL?

If all the investors are in Mallorca at the time of the registration of the company, the whole procedure can be completed in less than five days. If investors are out of Mallorca, you can get legal representation in Palma from our specialists in company registration in Mallorca, and we will offer you the possibility of being represented by the P.O.A. in Mallorca. That being the case, the registration procedure can be completed within 2 weeks.

We hope these tips prove to be useful and assist you in developing your business. Do not hesitate to contact us, our accountants in Palma will be glad to help you where needed, during and after, your company registration in Mallorca. We do it every day.

What are SL in Palma compliance requirements?

To govern a limited liability company in Palma a board of directors can be set with from 3 to 12 members, none of which needs to necessarily be a shareholder of the company; or alternatively, a director or directors (CEO) may be appointed at a shareholders meeting for a limited or unlimited period of time.

Accounting records must be available for evaluation purposes by the Spanish Commercial authorities and/or the national and local Mallorca Tax Authority (the Autonomous Community of the Balearic Islands or “Comunidad Autonoma de las Islas Baleares” as well as the local city council). Annual complete financial statements, business report, together with any changes affecting the management layout of the company must be submitted for shareholders’ approval at the annual general meeting.

If you are not an expert in Spanish Law and Tax in Mallorca, it is not advisable to try to do all this paperwork on you own, since errors in reporting may be severely punished by the Administration. Relying your SL in Palma tax and accounting compliance on a team with expertise in Tax and Spanish Accountancy in Mallorca will save you time and money.

Proceedings of accounting in Mallorca are compiled in the Spanish Generally Accepted Accounting Principles (GAAP) whereby it is established that a limited liability company (SL) annual financial statements must include cash flow statement, income statement, the balance sheet and other financial documents, taxes, etc.

What are the legal grounds for the dissolution of a Spanish SL?

Our legal and accountancy team in Mallorca advises you about the legal grounds for a Spanish SL to be dissolved:

• The attainment of the Corporate purpose: once the purpose established in the incorporation deed of the company is attained, shareholders may agree to dissolve and liquidate the company.
• Financial problems, including the potential scenario whereby the company’s net equity falls below 50% of the share capital. In this particular scenario, under Spanish Law , it is compulsory to dissolve the company.
• Other challenging and/or contentious situations your company may be involved in. Do not hesitate to ask us for advice. We are the best accountancy team in Mallorca.