From a legal point of view, the main difference is that in a Sociedad Limitada (similar to a limited liability company) the owners are liable only with the amount they have invested in the company, while an autónomo (sole proprietorship) is liable with the total amount of his personal assets, including property, money on bank account, car, etc. However, there are also some exceptions regarding the liability, because an administrator or owner of a limited liability company could still be responsible for personal assets in case of doing something illegal with the company, neglecting taxes or similar. On the other hand, a sole proprietorship could also limit the amount for which he is liable by choosing a special form of a sole proprietorship, which excludes the possibility for creditors to claim his home (to a certain amount).
Still, there are many other differences between these two business forms, such as the structure of the company, how much you can earn in the company, taxation and other matters as expenses. In general, one could conclude that a Sociedad Limitada is a good choice for those who aim to do business together with partners or would like to limit their liability in the company, while sole proprietorship is a very common and attractive choice for any freelancer that is planning to start a business in Spain, without aiming to share company profits with other partners or without a certain need to limit the liability against creditors.
Our INTRO™ multilingual lawyers can assist you in choosing the right business form, forming a company in Spain or incorporations for international structures.
Company Formation in Spain
Do you want to start your own business in Spain?
In Spain, there are different types of business forms to choose between. One of the most popular forms is the Spanish limited liability company (Sociedad Limitada) and the sole proprietorship (Autónomo).
Depending on which kind of company, you choose, there will be different requirements for the registration process. However, the first document you will need is the N.I.E. - number of the administrator/owner and registered address for the company.
For limited liability companies, the owner or the owners will also need to acquire a company bank account and pay the deposit for the shares, deed for forming the company and register the company in the local business register. In the case of a sole proprietorship, the process is different and the registration consists of notifications to the social system and the tax authority that the person is going to start an entrepreneurship.
Other things to take into account are the required contracts, insurances and possible registrations in professional registers for the economic activity that one is going to start, etc.
Our INTRO™ lawyers team will help you through the whole process, including finding a property for your business via our property search www.intromarbella.com (or an address service provider), formation and registration of the entity, assistance in opening a local bank account, insurances, etc.
The graph above shows statistics over the amount of enterprises in Spain in 2018, by number of employees.
The most common type of enterprises were "small companies" with no employees (appr. 1.8 million companies). Only 118 Spanish companies had over 5000 employees.
Graph and information from: https://www.statista.com/statistics/502368/number-of-enterprises-in-spain-by-number-of-employees/