10 characteristics of Limited Liability Company (SRL)

The limited liability company is a type of capitalist mercantile company that brings great advantages to the independence of the members that make it up, in aspects as important as the protection of their personal assets, from possible debts that the company or company may incur.

They are easy-to-manage companies since their creation process requires less bureaucratic procedures. On the other hand, the self-employed who decide to undertake in this way can have much less money. For all of the above, limited liability companies are one of the most commonly chosen options.

Although not all are advantages. To touch on some important points, these types of companies are highly controlled by law and in case of sale they are regulated by its internal statutes. In addition, in the event that banks request guarantees for lines of credit, the assets of the partners could be mixed up.

What is a limited liability company?

As its name indicates, a limited liability company (S.L) is one in which the partners acquire a certain type of responsibility, in which, for example, they will not respond to possible debts that are contracted, with their own assets, but rather only with the capital contributed by the partners that constitute it.

Main characteristics of a limited liability company

1. The responsibility assumed by the partners is called joint and several, that is, it is limited to the integrated capital, contributed by its members.
2. In this type of company there is no mandatory maximum or minimum number of partners, nor are they limited to partnerships between natural persons. In the event that the company is made up of a single person, it is called a unipersonal limited company (S.L.U).
3. For the company name, the name of the company must go and later its initials S.R.L or S.L, as the case may be. The name of the company must not coincide with other denominations previously registered by other companies, and it must be registered in the commercial register.
4. In general, the social capital is divided into shares, transmitted between the partners.
5. For the formation of this type of company, a minimum share capital of €3,000 (in Spain) is required, either in money or other types of assets (said assets must have been previously valued and have the approval of the members of the society). The maximum amount of share capital is unlimited.



6. The registered office must have been established within national territory, to which the company belongs. To change your domicile within the state, the administrator's approval is necessary and if it is at the country level, it must be approved at the partners' meeting.
7. The managing body must be defined and reflected in the statutes of the limited company, and fundamental details such as the duration or remuneration of the corresponding position. Some examples are: joint administrators, sole administrator, joint administrators or administration advisers.
8. The social objective or the activity to which the company will be dedicated must be previously defined in the constitution.
9. It will be the administrators, and not the partners, who assume the management responsibility of the limited liability company.
10. The limited liability company has a general meeting of partners, which is the supreme body, from which decisions that may affect the limited company in any important aspect emanate.

Said body is convened by the administrators during the first semester of the year in general meetings, in order to present the management of the previous year, approve accounts, distribute results, designate dismissals or new appointments.

• This type of company allows extraordinary general meetings to be called outside the ordinary period, by those members who own more than 5% of the share capital of the limited company.
• The administrators and those people with administrative or control positions within the company must be registered with the social security.
• This type of company must declare quarterly and annual VAT, in addition to paying the tax corresponding to this type of company.

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