social object

It is a minimum statement required by law of the purpose to which the company will be dedicated. Here, however, experts agree that some specifications need to be included, including:

detailed wording

About the activity and the target group. According to the expert Miguel Angel Armendala very general description “can make it impossible for you to start a collaboration with third parties or to participate in a public tender or even prevent you from registering with the relevant register, since there are activities that, besides the commercial, must be registered with the trade or social welfare office”. The recommendation is therefore to describe the type of activity in as much detail as possible, since everything that lies outside the purpose of the company cannot be carried out by the company. It is even more important to specify when a company must register with the business register in order to issue and obtain licenses and permits, which it only obtains for the specified activities.

In addition, as indicated by the lawyer Francisco Melado“will determine the extent of representation of the Company’s directors.

Additional Clauses

They enable the expansion of the target audience, cooperation with public administrations or participation in joint ventures and cooperation with third parties. It is therefore appropriate to add a clause that states: “The same activities can be carried out with public administrations” required to participate in a public tender.

share capital and shares

The law requires that the articles of incorporation state the share capital with which the company is incorporated. The minimum in a limited liability company is 3,006.05 euros. And here the experts give us some recommendations:

The more capital, the better image

If, for example, the shareholders bring in 50,000 euros due to the required investment volume, they recommend registering the entire money as share capital because it represents an image plus for the company with the prospect of obtaining external financing.

Even if you pay more

However, according to Armendal, this extra money is “usually included as an investment contribution because writing up total capital can increase business costs.” For example, notary fees or corporate income tax, which have been exempt since 2010 for the formation of companies, capital increases or shareholder contributions that do not include a capital increase, can be included again in the future and assume further additional costs.

A commonly used formula is to make that extra contribution Borrow money from partners, but the regulations require that the capital coming into the company through this formula must appear in a loan agreement and bear interest. The value of the company does not increase in accounting terms, which does not benefit its image either.

benefits in kind

In a limited liability company, 100% of the share capital doesn’t have to be in cash, it can also be a tangible interest: private vehicles, computers, ships… It’s ok if you don’t have the amount in cash but have cash in this one case, the value of the goods must exceed the share capital limit. In order to be able to contribute this wealth, it is sufficient for the shareholders to accept the value and make it available to the company. The documentation must be submitted to the notary and it is convenient to do so if we want the equity value of the company to increase.

For the Sociedad Limitada Nueva Empresa (SLNE) there is no possibility to replace the cash benefit with benefits in kind, only in cash.

Transfers and Releases

This section describes how the shares will be divided between the different partners and what the transfer policy will be. It is time to determine whether the entry of external partners will be accepted, what policy to follow in the event of death… It is the future X-ray of the functioning of the company, so it is advisable to be very careful in its wording that the will contain the following points:

sale of shares

It may involve the entry of partners other than the founders. According to the law, before you sell your shares, you must inform the administrative authority Who are you selling to and to what Price to give the other partners a preferential purchase option. If they haven’t spoken out in three months, you can proceed as you wish. Deadlines can also be made more flexible by lowering them or making them more rigid.

In this section you can include clauses that state the obligation that they are assessed by external experts and independent to avoid maneuvers that destabilize majorities in society by overvaluing stocks.

Another clause that can be used is limit the number of shares which are freely available to ensure continuity. Or, conversely, make it difficult to sell shares by stipulating that under no circumstances may they be sold below the percentage set in the Articles of Association.

broadcasting rights

The law states that it can be passed freely to descendants, ancestors and spouses. And while that seems fair a priori, it may not be what the rest of the partners want. In these cases, it is appropriate to introduce a clause ‘establishing the right to acquire the shares of the dying partner for the benefit of the rest, and failing that, for the benefit of the company’.

administrative bodies

There are multiple possibilities in a SL: sole administrator, several joint administrators, several joint administrators or a board of directors.

sole administrator

He acts on behalf of the company and is responsible for all company actions. In the case of debt, he responds with his wealth. It can be external or one of the partners, and the position can be paid or not. Unless otherwise stated, the position is vacant and permanent and can be filled by an external person. One of the most common mistakes is failing to record and then paying a salary anyway, a practice that is not only illegal but also has tax and accounting ramifications. The advice is to enter Additional Clauses not indicating the amount, but the remuneration system with which they are paid: participation in the company’s profits (which can never exceed 10%) or a market salary, determined annually by the general meeting, depending on the results… It is also advisable to define its functions in the articles of association and to specify whether they are internal or external.

Multiple admins

When management is delegated to two or more people, they can act in one together or several. The first model is preferable when it comes to avoiding abuse of power and the supportive model when it comes to gaining operational agility. recommended is to reconcile both formulas by opting for the solidarity model but adding a clause limiting responsibilities.

The board of directors

It is more intended for larger and more complex organizations. It’s more typical of Anonymous Society (SA), requires the presence of at least three people, everything must be made public and is less operational.

Agreements between partners

It is very important to define when, where and under what conditions the agreements will be made in the company.

Change the majorities

The law dictates that the agreements are entered into by majority vote, and where nothing is specified, one share is usually assumed to be one vote. Again, we can make the Articles of Incorporation more flexible or tightened, particularly on some sensitive issues such as expanding the company’s purpose, transferring shares and selling the premises where the activity takes place. For example, you can require that a minimum of 2/3 be set or that there be at least x yes votes.

clarify functions

Like what are they Homework of each of the partners and how they are doing will pay back. It is not necessary to set an exact amount, it is about setting up the payment system. Put those too profit sharing. If not specified, it is assumed that it is carried out on a holdings basis. On the one hand, it is important to define what Percentages are intended for reinvestment and what to distribute and, on the other hand, to set the distribution keys so that different responsibilities in the company correspond to different incomes.

Closing of the financial year, liquidation and arbitration

The closing of the financial year usually has no significant impact. Another thing is the formula that will be adopted for the dissolution of society: this can indeed have implications for the future and that is why it is interesting to bind them as much as possible and form special majorities. It is also advisable to include a special arbitration clause for social disputes with an authority other than the commercial courts, to prevent the excessive work of this institution from paralyzing critical processes in society.

company management