What are the differences between an SA and a SL?

Limited society

  The limited company, SL, or limited liability company, SRL, is a commercial company with legal personality, its capital is divided into equal, cumulative and indivisible shares. Its partners are not personally liable for the debts contracted by the company, but only with the capital contributed.

  Limited company

  For its part, the limited company, SA, is also a commercial company with legal personality, but its capital is divided into shares. These shares may have a different nominal value or have different privileges attached to them and may be freely transferable. In addition, shareholders are not liable with their personal assets for the company's debts, only up to the amount of capital they have contributed.

In both cases the number of partners to form the company can be one or more.

And what are the differences between the two societies?

Initial capital

To set up both companies, an initial contribution of capital is required, which in the case of the limited company is one euro thanks to Law 18/22, although for the purposes of liability to creditors, the capital remains fixed at 3,000 euros, and in the case of the limited company it rises to 60,000. In the SL the initial capital can be subscribed and disbursed at the time of setting up the company, while in an SA only 25 percent of the capital needs to be subscribed and disbursed.

Type of activity

An SL can carry out practically any activity, except those that are reserved by law for joint-stock companies, such as banking companies, pension fund managers or insurance companies. Those companies that want to be listed on the stock market will also have to be SA. SLs are designed for small and medium-sized companies with few partners, family businesses or professional companies that do not need a large outlay of capital. Whereas SAs are better suited to activities where a larger number of members are needed to achieve greater capital and it is considered that there will be greater mobility.

Number of partners

It is common to think that only limited companies can be established with a single partner, but this is not the case. Both models can be launched with the presence of a single partner, called a sole proprietorship. In addition, it does not have to be a natural person, but the sole partner can also be a legal person and even operate without employees.

Incorporation procedures

Apparently, to set up a company, the procedures are the same, regardless of whether we choose to be anonymous or limited, it is only necessary to issue a public deed and for it to be registered, subsequently, in the commercial register. But in practice it is much simpler to create a limited company. The reasons are quite obvious, by requiring a much smaller initial capital, the statutes tend to be simpler and the procedures related to finance, for example, tend to be quicker.

social reason

All companies must be registered in the commercial register under a name or company name that differentiates them from the rest. In both cases, this name must be accompanied by the initials SA or SRL, as appropriate. This is so that consumers and other businesses can know at all times the corporate model to which the companies belong and act accordingly.

Transfer of social shares

The transfer of the social shares of a limited company is restricted, and must be done in accordance with its statutes, or additionally, in accordance with the law, in the event that the statutes do not regulate the transfer regime holdings It is necessary to communicate the intention to sell them, the number of shares to be sold and the price; the rest of the partners have a preferential right of acquisition. In addition, this transmission will be made in a public document. On the other hand, the transmission of the shares of a joint-stock company is free, once the company is entered in the commercial register, through a business between the parties (usually a sale) and the delivery of the titles.

So which is better, an SA or a SL?

After seeing the main differences and similarities of the two company models, you must have realized that there is no single answer to the question of whether to opt for an SA or a SL. It will always depend on the characteristics of each business and the needs of the partners.

If what you want is to start a company without having to make a large contribution of capital, without a doubt what interests you is to set up a limited liability company. Whereas for a large scale business both models would play the same role.

On the other hand, it is important to be clear about the number of partners with whom you will set up the company. For projects with few participants, the SL is the best option, but if you are considering the capital to be divided into shares among hundreds of partners, you will clearly be more protected with an SA

With regard to its legal complexity, this is much more accentuated when setting up a limited company, compared to what it means to set up a limited company.

If you need more information, do not hesitate to contact DATA AND SERVICES