The deed of incorporation is an essential document in the process of setting up a company in Spain. This public instrument, executed before a notary, formalises the existence of the entity and regulates key aspects such as the identity of the partners, the corporate purpose and the share capital. In this article we explain everything you need to know about this process, updated according to the latest regulations.
What is the Memorandum of Association?
The deed of incorporation is the official document that gives legal life to a company. It is executed before a notary and subsequently registered in the Commercial Register, which gives the company full legal validity.
It includes essential elements such as:
- The company name.
- The founding partners.
- The distribution of holdings or shares.
- The articles of association, which regulate the internal functioning of the company.
Types of companies that require a Memorandum of Incorporation
In Spain, the deed is compulsory for all commercial companies, such as:
- Limited Liability Companies (SL).
- Public Limited Companies (SA).
- Limited Partnerships (Sociedades Comanditarias).
- Worker Owned Companies.
Requirements prior to incorporation
Before going to the notary, you must complete certain essential steps:
- Choice of Company Name
Apply for the Negative Certificate of Company Name at the Central Mercantile Register. This certificate guarantees that the name is not registered by another company.
- Contribution of Share Capital
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- For an SL, the minimum capital required is now 1 euro, according to Law 18/2022, although with certain limitations up to 3,000 euros.
- For an SA, the minimum is 60,000 euros, of which at least 25% must be paid up at the time of incorporation.
- Drafting the Articles of Association
The articles of association are the internal rules of the company, and must include:
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- The corporate purpose (main activity).
- The registered office.
- The duration of the company.
- The management structure.
- Obtaining the Provisional CIF
Apply for the provisional Tax Identification Code (CIF) at the Tax Agency to start the company’s activity.
Content of the Memorandum of Association
The Memorandum of Association must include the following:
- Identification of the Founding Partners
The name, surname(s) and DNI/NIE of the partners (natural persons) or the CIF and company name (if they are legal persons).
- Company name
It must coincide with the name registered in the certificate issued by the Central Mercantile Register.
- Corporate purpose
The main economic activity to be carried out by the company is detailed.
- Share capital
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- Amount of share capital.
- Type of contribution (money, goods or rights).
- Distribution of shares among the partners.
- Registered Office
The address of the head office is specified.
- Articles of Association
Rules governing the internal functioning of the company, including the management structure and relations between partners.
- Appointment of directors
This identifies the persons responsible for the management of the company (sole, joint and several or joint administrators).
Procedure for Signing and Registering the Deed
- Signing before a Notary
Once all the documentation has been completed, the founding partners must go to a notary’s office to sign the deed.
- Registration in the Mercantile Register
The notary will send the deed to the corresponding Mercantile Register, where the company will acquire legal personality.
- Obtaining the definitive CIF
After registration, the definitive CIF is requested from the Tax Agency.
Tips for an Efficient Incorporation
- Check the Availability of the Name: Make sure that the name is available before starting other procedures.
- Clearly define the corporate purpose: This avoids legal problems in the future.
- Provide the Required Capital: If the capital is less than 3,000 euros, remember to comply with the limitations imposed.
- Get professional advice: A specialised lawyer will help you avoid mistakes and ensure compliance with regulations.
The deed of incorporation is a key step in setting up a company in Spain. With recent legal changes, the process has become more accessible and streamlined, especially for small companies. However, it is essential to comply with all legal requirements and to have professional advice.
At Gutiérrez Pujadas & Partners, we offer specialised services for company incorporation, ensuring that every step is carried out in accordance with current regulations. Contact us for more information or to start your business project with complete confidence.
FAQs on the articles of association of a company in Spain
1. What are the articles of association of a company?
The articles of association are the official document that gives a company legal existence in Spain. They are granted before a notary and must be registered in the Companies Register for the company to acquire legal personality. It contains key information such as the company name, the founding partners, the share capital, the statutes and the corporate purpose. Without this document, the company cannot operate legally or hire employees. It is an essential step in the process of setting up a company, ensuring regulatory compliance and protecting the rights of the partners.
2. Why is the certificate of incorporation necessary?
It is necessary because it formalises the existence of the company before the law and guarantees its registration in the Mercantile Registry. Without it, the company cannot operate legally, open bank accounts or obtain a definitive tax identification number. It also establishes the internal rules of operation through the company statutes, which helps to avoid future conflicts between partners. In addition, it allows access to financing and the signing of contracts on behalf of the company, providing legal security to businesses.
3. Who should sign the articles of association?
They should be signed by the founding partners of the company, who may be individuals or legal entities. The signature is made before a notary, who attests to the validity of the document. It must also be signed by the administrator or administrators designated in the statutes. In some cases, if there are non-monetary contributions to the share capital, the intervention of an independent expert to value these assets will be necessary. It is essential that the signatories present their identity documents and, if they are acting on behalf of an organisation, the documentation accrediting their power of attorney.
4. Where is the articles of association signed?
The articles of association are signed at a notary’s office, where the notary public certifies the authenticity of the document and verifies that it complies with current regulations. After signing, the notary can send the deed to the Companies Register electronically to speed up the process. It is advisable to choose a notary with experience in company incorporation to avoid errors in the documentation. The content of the deed can also be agreed in advance to make the signing process quicker and more efficient.
5. How much does the deed of incorporation of a company cost?
The cost varies depending on the type of company and the share capital contributed. Generally, notary fees range from 100 to 300 euros for a Limited Company (Sociedad Limitada, SL) with minimum capital. In addition, registration in the Commercial Registry costs between 100 and 250 euros. Other expenses include obtaining the CIF (tax identification number), payment of administrative fees and, in some cases, legal advice. Although the incorporation of companies is exempt from Property Transfer Tax and Stamp Duty, Form 600 must be submitted.
6. How long does it take to obtain the certificate of incorporation?
The process usually takes between 24 and 72 hours from the signing before a notary. If the notary sends the documentation to the Companies Register electronically, registration can be completed in a few days. However, if it is done in person, the process can take up to 15 working days. To speed up the process, it is advisable to have all the documentation in order and to check in advance that the company name is available in the Central Companies Register.
7. What is the difference between the articles of association and the bylaws?
The articles of association are the document that formalises the creation of the company and is signed before a notary. It includes essential information such as the identity of the partners, the share capital and the company purpose. The company statutes, on the other hand, form part of the articles of association and establish the internal rules of operation of the company, regulating aspects such as administration, decision-making and the transfer of shares. Both documents are necessary to register the company in the Companies Register.
8. What are the main mistakes when drafting the articles of association?
Some common mistakes include:
- Not verifying the availability of the company name before applying for it.
- Defining a corporate purpose that is too broad or ambiguous, which can lead to legal problems.
- Failing to correctly specify the distribution of shares among the partners.
- Drafting company statutes that lack detail, which can cause internal conflicts.
- Not including clauses on the management and administration of the company.
- To avoid these errors, it is advisable to seek advice from a lawyer specialising in commercial law.
9. Is it compulsory to register the articles of association at the Companies Registry?
Yes, registration in the Companies Register is compulsory for the company to acquire full legal personality and be able to operate legally. Without this procedure, the company will not be able to obtain its definitive tax number, issue invoices or sign contracts in its name. The notary usually sends the deed to the Register electronically, but if it is presented in person, the partners must ensure that they deliver all the required documentation. Registration is also necessary so that third parties can find out about the structure and operation of the company.
10. What happens if I don’t register the deed with the Companies Registry?
If the deed is not registered with the Companies Registry, the company lacks legal personality, which means that the partners will be personally liable for the debts and obligations incurred. In addition, the company will not be able to open bank accounts, issue invoices or enter into contracts in its name. In some cases, the authorities may penalise companies that operate without being registered. To avoid these problems, it is essential to complete the registration as soon as possible after signing before a notary.
11. Can the articles of association be amended after they have been signed?
Yes, the articles of association can be amended if the partners agree and formalise the changes in a public deed before a notary. The most common modifications include changes to the company name, the company purpose, the share capital, the company address and the management structure. After signing the new deed, the company must register the modifications in the Companies Register for them to have legal effect. Depending on the change, it may be necessary to pay additional fees.
12. What is the Company Name Clearance Certificate and why is it important?
The Negative Company Name Certificate is a document issued by the Central Mercantile Register that certifies that the name chosen for the company is not registered by another company. It is mandatory in order to include the name in the articles of association. If you try to register an existing name, the application will be rejected, which can delay the incorporation of the company. It is recommended to request several name options to avoid problems in case the first choice is not available.
13. How much does it cost to obtain the Certificate of Good Standing?
The cost of the Certificate of Good Standing is around 15 euros, although this may vary slightly. The procedure can be carried out electronically via the website of the Central Mercantile Register and is usually resolved within 24 to 48 hours. Once obtained, it is valid for three months, so it is advisable to complete the incorporation of the company within that period to avoid the need to apply for a new certificate.
14. Can I set up a company with a single partner?
Yes, in Spain it is possible to set up a Sole Proprietor Limited Company (SLU), which allows a single person to be the sole owner of the company. In this case, the articles of association must reflect that the company is a sole trader and the sole partner will make all the decisions without the need for agreements with third parties. Although it offers limited liability, the sole partner must fulfil certain obligations, such as declaring their sole trader status in the Companies Register and keeping a contract book if they have commercial relations with their company.
15. What is the minimum share capital to set up a company in Spain?
The minimum share capital varies according to the type of company:
- Limited Company (SL): From 1 euro, although with restrictions up to 3,000 euros.
- Public Limited Company (SA): 60,000 euros, of which at least 25% must be paid up on incorporation.
- This capital can be in the form of money or assets contributed by the partners. The choice of capital influences the structure of the company and the confidence of third parties.
16. Can I contribute assets instead of money as share capital?
Yes, the partners can contribute assets or rights instead of money as share capital. These contributions must be valued and detailed in the articles of association. In the case of a Public Limited Company (SA), the law requires an independent expert to carry out a valuation of the assets. In a Limited Company (SL), the partners can determine the value, although they may be liable if the valuation is not adequate. Examples of contributions include real estate, machinery, vehicles or intellectual property.
17. What taxes must be paid when setting up a company?
Incorporating a company in Spain is exempt from the Tax on Capital Transfers and Documented Legal Acts (ITP-AJD), but it is compulsory to present Form 600 to justify the exemption. Other fiscal costs may include VAT on the purchase of goods necessary for the business and the registration fee for the Companies Register. In addition, once the company has been incorporated, it must register with the Tax Agency and comply with its periodic fiscal obligations.
18. What is the Tax Identification Code (CIF) and how is it obtained?
The Tax Identification Code (CIF) is the number that identifies the company for fiscal and legal purposes. It is obtained from the Tax Agency after the articles of association have been signed and the company has been registered in the Companies Register. Initially, a provisional CIF is granted, which allows the company to operate while the registration is being completed. Once the process is finalised, the definitive CIF is requested. Without this number, the company cannot issue invoices or carry out financial operations.
19. How long does it take to obtain the definitive CIF?
The provisional CIF is obtained at the time of the application to the Tax Agency, which allows the company to start its activities. However, the definitive CIF is only granted after the registration of the deed in the Mercantile Registry. This process can take between 10 and 15 working days, depending on the workload of the registry. Once the company has been registered, the corresponding documentation must be presented to the Tax Agency to obtain the definitive number.
20. Is it compulsory to register the registered office in the articles of association?
Yes, the registered office must be specified in the articles of association and in the company’s statutes. This address will be the company’s official headquarters and will determine the Commercial Registry in which it will be registered. It is also relevant for the Tax Administration and other public entities. The company can change its registered office in the future, but it must formalise the change by means of a new deed before a notary and its registration in the Companies Register.
21. What is the difference between registered office and tax domicile?
The registered office is the official headquarters of the company and must appear in the articles of association. It determines the Companies Register where the company is registered and is the legal point of reference for official notifications.
The tax domicile is the address where the company is registered with the Tax Agency and where it receives tax notifications. In many cases, both addresses coincide, but they can be different if the company carries out its activity in another place.
22. Can the registered office be changed after the company has been incorporated?
Yes, the registered office can be changed by means of a public deed signed before a notary and registered in the Companies Register. If the change is within the same province, the administrator can decide it without the need for a shareholders’ meeting, provided that the statutes allow it. If the change is to another province, the modification must be approved at a general meeting. In addition, the Tax Agency must be notified to update the tax address.
23. How long does it take to set up a company in Spain?
The time varies according to the type of company and the method of registration. If everything is in order, a Sociedad Limitada (SL) can be set up in about 5 to 10 working days if the telematic procedure is used with the notary and the Commercial Registry. However, if the registration is done in person, the process can take up to a month. The speed of the process depends on the workload of the organisations involved and the correct presentation of the documentation.
24. What documents are required to sign the articles of association?
To sign the articles before a notary, the partners must provide:
- Certificado Negativo de Denominación Social (Central Mercantile Register).
- DNI/NIE or passport of the partners and administrators.
- Proof of share capital, either bank deposit or description of assets contributed.
- Company statutes with the company’s internal regulations.
- Provisional tax number, which is obtained from the Tax Agency after signing.
If a partner is acting on behalf of an organisation, they must provide notarised powers of attorney.
25. What happens if the share capital is not deposited in a bank account?
If the capital is not deposited in a bank account, the articles of association can include a statement from the partners confirming that they have contributed the money or assets to the company. However, this method is only viable for limited liability companies (Sociedades Limitadas, SL). In the case of a public limited company (Sociedad Anónima, SA), it is compulsory to deposit at least 25% of the minimum share capital in a bank account before incorporation.
26. Can I set up an online company without going to a notary?
No, in Spain the articles of association must be formalised before a notary. However, some procedures can be done online, such as reserving the name and registering with the Companies Register. In addition, certain PAEs (Entrepreneur Service Points) offer telematic procedures to speed up the incorporation process. Even so, signing before a notary is still a mandatory requirement.
27. What types of administrators can a company have?
Companies can have different administration structures:
- Sole administrator: A single person manages the company.
- Joint and several administrators: Each administrator can act individually.
- Joint administrators: They must act jointly.
- Board of Directors: A collegiate body with a minimum of three members.
The choice depends on the structure and needs of the company. It is specified in the articles of association.
28. Do the administrators have to be partners in the company?
It is not compulsory for the administrators to be partners. The company can appoint an external person as administrator without shares in the company. However, in some cases, the statutes may establish restrictions in this respect.
29. How are administrators appointed in the articles of association?
The articles of association detail:
- The full name or company name of the administrator.
- DNI/NIE or CIF if it is a company.
- Type of administration (sole, joint, joint and several, board).
- Term of office and method of replacement.
The appointment must be registered in the Mercantile Register to be legally valid.
30. Can a foreigner be a partner or administrator of a company in Spain?
Yes, a foreigner can be a partner or administrator, but they must obtain an NIE (Foreigner Identification Number) to carry out legal procedures in Spain. If they reside outside the EU, they may need special authorisation depending on the activity of the company.
31. What is the corporate purpose and why is it important?
The company object defines the main activity of the company and must be clearly specified in the articles of association. It affects tax, labour and administrative issues. If the company expands its activities in the future, it may be necessary to modify the articles of association to update the company object.
32. Can several activities be included in the company object?
Yes, but it is recommended that they be related activities. An overly broad corporate purpose can create problems when applying for licences or accessing certain tax benefits. In addition, some activities require special authorisations.
33. What is a company in formation?
It is a company that has signed the articles of association before a notary but is not yet registered in the Commercial Register. During this period, the company can operate, but the partners are personally liable for its obligations until final registration.
34. When does a company come into existence once it has been incorporated?
The company acquires legal personality once it has been registered in the Companies Register. Before that, it can operate under the status of company in formation, but the partners will be liable with their personal assets for the obligations acquired.
35. What happens if one of the partners cannot attend the signing of the deed?
If a partner cannot attend, they can grant a power of attorney to another person to sign on their behalf. The power of attorney must be notarised and specify the authorisation to sign the articles of association.
36. Can the partners have different percentages of participation in the company?
Yes, the articles of association must reflect the distribution of the share capital among the partners, indicating what percentage of shares corresponds to each one.
37. What is the share transfer clause?
It is a clause within the statutes that regulates how shares can be sold or transferred between partners or to third parties. It is useful for preventing the entry of unwanted partners.
38. What happens if a partner wants to leave the company?
They must follow the procedure established in the statutes. They can sell their shares to other partners or third parties, respecting the right of first refusal if it is provided for.
39. Can the share capital be increased after incorporation?
Yes, by means of a resolution of the partners and the signing of a new deed before a notary. The increase must be registered in the Companies Register.
40. When must the articles of association be renewed?
Only when changes are made to essential data, such as the name, registered office, company purpose or administration.