Spain's Limited Liability Company Rules: Formation and Closure Guidelines

In Spain, a Sociedad Limitada (SL) can be created with a minimum capital of one euro. The constitution process requires a negative name certification, drafting of statutes, a public deed before a notary, obtaining a provisional and then definitive CIF, registration with the Registro Mercantil, and tax registration using model 036. After incorporation, the company must file corporate tax returns, VAT declarations, payroll withholdings, maintain accounting records, and submit annual accounts.

If an SL ceases activity, the administrator can opt for temporary inactivity by marking the appropriate box on model 036, keeping the company alive but inactive. Prolonged inactivity (over a year) triggers a presumption of definitive cessation, leading to mandatory dissolution and liquidation. The dissolution steps include liquidating assets, settling liabilities, cancelling the CIF with the Agencia Tributaria, and removing the entry from the Registro Mercantil to avoid sanctions or personal liability for the administrator.