What is a Limited Company?

When starting a new business, we have to take into account what type of company is best for us. There are several different groups, such as the Limited Company. Although it is true that in any consultancy, they can inform us about them, it is advisable to inquire before the advantages and disadvantages of each one.

 If you are thinking of creating a company, we will show you what a Limited Company is, the most common legal form used by entrepreneurs today.

What is a limited society?

The Limited Liability Company, also known as Limited Partnership, is the commercial company that is most used in places. Entrepreneurs who want to create a new business opt for this type of legal form to limit the liability to the contributed capital. In this way, the employer avoids responding with his personal assets if the business were to incur debts.

Partners of the Limited Company

The number of partners must be a minimum of one and there is no maximum limit for them. If we opt for a single partner, we must establish a sole proprietorship. The liability of these partners will be joint and several between them and limited to the capital contributed. In addition, the same partners can be working partners or capitalist partners.

Name or Company Name

The name chosen for the Limited Company should no longer appear in the Central Mercantile Registry. For this reason, we must ensure that it does not appear in the registry followed by the expression SRL or SL

Social capital

Regarding the share capital, the legal minimum will be 3,000 euros with no maximum limit. This capital stock can be made up of monetary contributions or material cash.

Incorporation of the Limited Company

The incorporation of the Limited Company will be carried out through statutes and public deeds that must be signed before a notary public. All this must be submitted to the Commercial Registry. In addition, we must detail the corporate purpose (company activity) and the contributions made by each partner, as well as the percentage of share capital of each one.

Advantages of the Limited Company

Among the advantages, we highlight the fact that the liability against possible creditors is limited to the capital stock and the assets of the company. In addition, we can say that the bureaucratic procedures to establish such a company and put it into operation are relatively simple. On the other hand, from a certain level of benefits, the taxes to which it is subjected are lower than those of the self – employed. They also have greater ease in accessing bank loans.


The main drawback is that the shares are not easily transferable, since their sale will be completely regulated by the established statutes as well as the law. Therefore, it is not at all suitable if what we want is to attract as many investors as possible.

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