Are you interested in registering as a limited liability entrepreneur?

It can be defined as any natural person who carries out a commercial, commercial or freelance activity in his own name and through a company. The figure of the Limited Liability Entrepreneur (ERL) arose with the law supporting entrepreneurs and their internationalization -Law 14/2013-. Its main feature is that it excludes certain entrepreneurs from being liable with their habitual residence for debts incurred as a result of their economic activity. Thus, it secures part of the wealth of the person who decides to work independently.


However, not all entrepreneurs can benefit from this number. The standard – later updated in 2015 – specifies a number of requirements. Among them are:

-The value of the house must not exceed €300,000. This assessment is based on the tax base for the tax on property transfers and documented legal acts at the time of entry in the commercial register. The measure only affects the dwelling for ordinary use, not the rest.

-In the case of dwellings in a population greater than 1,000,000 inhabitants a coefficient of 1.5 is applied to the value of the previous paragraph.

-In the registration of the commercial register Depending on your place of residence, state your own or joint immovable property that should not be linked to the results of business or professional activity.

-You will not be able to profit The debtor who has acted intentionally or with gross negligence in the fulfillment of his obligations towards third parties is subject to the limitation of liability, provided this has been confirmed by a final judgment or declared guilty in insolvency proceedings. Entrepreneurs with debts incurred prior to the formal status of limited liability entrepreneur (which occurs through registration in the commercial register) and for tax or social security debts are also excluded.

-Unless creditors agree the debtor’s joint liability for the debts incurred as a sole proprietorship with limited liability prior to its entry in the commercial register expressly remains in place.

-If the employer is married may result in the liability resulting from your activities reaching your spouse. For this reason, the economic circumstances applicable to the marriage and the nature of the assets involved must be taken into account.


According to him Information center and business creation network (CIRCE) “it is an ideal form of enterprise for the operation of very small businesses”, taking into account that “it can be more economical since no legal entity other than the entrepreneur himself is created”.

However, even in practice it does not appear to be that easy or that cheap to obtain ERL status. Formal obligations to acquire this status include:

– Appearing before a notary to formally declare the will to obtain the status of an entrepreneur with limited liability (ERL), stating the economic activity to be carried out and the determination of the habitual residence. It is also valid to fill out an application with the electronic signature of the self-employed person and his electronic submission to the Commercial Register for registration.

-Register the notarial deed or the electronically signed instance in the commercial register the home of the self-employed.

-Entry in the relevant land registry, the proof in the registration entry of the habitual residence of the self-employed that this belongs to an ERL. This procedure is usually carried out by the commercial register.

-Once registered, The identification of the entrepreneur as an ERL must be included in all documents.

– Filing of the annual accounts in the commercial register. If seven months elapse after the end of the financial year without the annual accounts being filed with the Commercial Register, the entrepreneur loses the advantage of the limitation of liability in relation to the debts incurred after the expiry of this period. But you will get the benefit back at the time of presentation.

-Taxation. Another disadvantage is that the entrepreneur is taxed more heavily the higher his income volume is. Sole proprietors are taxed through income tax.

criticism of this character

Some professionals consider this legal number unnecessary and misleading. So on the blog of JRA economists They speak of a “misleading designation” in the sense that “the general liability of the entrepreneur is not limited, only his habitual residence is protected from the claims of his commercial creditors, provided that a number of conditions are met”. They also describe the bureaucratic processes as “expensive and complicated”.

The result is that despite the fact that it should be a measure to encourage entrepreneurship and protect the self-employed, the truth is that the majority of the latter continue to choose to register as ordinary self-employed and rely on the Limitations to Waiver Liability.