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In our legal practice, entrepreneurs who have recently arrived in Spain often have the question of what is better to create, an SL or an autonomo, to conduct business.

We have analyzed more than 300 requests and real cases and in this article we will outline the main positions on this issue.

First of all, let's consider what on page seo service an autonomos is in Spain. According to Spanish law, an autonomos (autonomos, autónomo) is any individual who is engaged in entrepreneurial activity or receives income as a freelancer, in other words, an individual entrepreneur, sole proprietor, or self-employed person. An autonomos can also be a person who is not engaged in entrepreneurial activity if he or she is the administrator (CEO) of a company. Read this article to find out whether an administrator (director) must have a residence permit in Spain or receive a salary . An autonomos is liable for debts (including salaries of hired workers) with all of their property without limitation.

SL is a Limited Liability Company that is liable for its obligations with the contributed share capital. It can be created by both individuals and legal entities. This is the most common form in Spain due to its simplicity of creation, management and bankruptcy.

So, what is better for doing business in Spain: a company or an autonomo?

Objectives of activities and responsibility.
First of all, you need to decide on the OKVEDs of the activity: will the business be risky, can the entrepreneur bear personal liability, will he have employees. If you have a business that can have high liability (restaurants and cafes, business in the Fintech sector, etc.), then it is better to limit liability to the company and its authorized capital. Also keep in mind that in Spain the main expense is labor, so in the event of unjustified dismissal, the employee will have to pay compensation from his own funds.

Turnover.
With a turnover of up to 40,000 euros, you can usually get by with an autonomo (unless it is a risky business). Starting from this amount, it makes sense to create a company for tax planning purposes: an autonomo is subject to personal income tax (up to 47%), and an LLC is subject to taxation at 25% (the first 2 years - 15%, start-ups - 4 years).

Participants.
It is not advisable to have an autonomous company if the business is run by several people, since the project will be registered for one person. When there are several participants, it makes sense to register a company with the distribution of shares of each. It is extremely important to prepare an agreement of participants between the founders in order to avoid disputes and liquidation of the company in the event of a lack of consensus on any issues. Drawing up an agreement will cost you from 1,000 to 2,500 euros, and conducting a lawsuit or liquidating a company 15,000 - 100,000. Save wisely.

Attracting investments.
If your company or startup plans to attract outside investment, especially through equity giveaways, there is no escape from creating a company. Business angels and funds are included only in legal entities.



Further possible resale of the business.
If you believe that your project can eventually grow into a serious business that can go public or merge with another company, then in this case the company is also inevitable.

Intellectual and industrial property rights.
If you are planning to apply for registration of a brand, logo, patent, etc., then doing this on Autonomo does not make sense, since this is one of the most important intangible assets.

The difference also lies in the cost of maintaining mandatory tax and accounting services: for an autonomous organization, the prices are much higher (from 350 euros per quarter for professional market participants) than for a company (from 900 euros per quarter for professional market participants).

We often advise our clients to outsource their accounting, but to consult a lawyer who specializes in business law or new technology law for legal matters. In Spain, some sectors are quite strictly controlled (personal data protection, , consumer protection, cybersecurity, e-commerce, employee protection, etc.), so in case of incorrect legal support of the data

Do not forget that in Spain legal activity is regulated and only a lawyer with a valid , who is a member of the bar association, can provide legal services (any, even drafting contracts) (you can check the and insurance certificate of your lawyer on this website https://www.abogacia.es/servicios-aboga ... -letrados/ ).

Our lawyers will help you register an autonomo or company in one day or by going through the standard registration procedure. We will also help you with further business maintenance and legal settlement.