How to create a company from one euro with the Create and Grow Law

The approval of the Create and Grow Law has generated a series of novelties aimed at activating the economy, especially with regard to the growth of SMEs, and reducing delinquency.

One of the main innovations of this regulation refers to the company creation. Since its approval, the possibility of founding a limited liability company with just one euro.

This boost for small and medium-sized companies will also be reflected with the incorporation of another package of measures that facilitate the creation of a company, by reducing the economic cost and simplifying the procedures for its constitution in an agile and telematic way.

With this initiative, the legal minimum of 3,000 euros established until then, allowing companies to use these resources in alternative uses and facilitating the creation of new businesses.

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In this way, according to the Government, Spain aligns itself with a large part of the countries around us in which a minimum capital is not required, thus favoring entrepreneurship. Likewise, the telematic constitution of companies is facilitated through the single window of the Information Center and Network of Company Creation (CIRCE), which guarantees a reduction in the deadlines for its creation and in notarial and registry costs.

However, in the case of public limited companies, the share capital may not be less than 60,000 euros and will be expressed in the same currency. In this case, it is tacitly said that “Deeds of incorporation of a capital company that have a share capital figure lower than that legally established, nor deeds of modification of the share capital that reduce it below said figure, will not be authorized, unless it is a consequence of compliance with a law”.

20% of profits to the Legal Reserve

However, and despite the fact that organizations can be set up with just one eurothey will be forced to allocate 20% of their profits to the Legal Reserve item, until this, added to the share capital, reaches the minimum figure of 3,000 euros, as indicated by Emprendedores.

On the other hand, if the company has debts and is dissolved without being able to satisfy the debts with the resulting equity, the partners will be jointly and severally liable for the difference between the amount of 3,000 euros and the subscribed capital figure.

With this measure, the Create and Grow Law reduces and speeds up the procedures and conditions for the constitution of a limited liability company, promotes its growth through regulatory improvement, generalizes the use of electronic invoicing, establishes measures to fight against delinquency in commercial operations and promotes alternative financing by promoting mechanisms such as crowdfunding, collective investment or venture capital, according to El Diario.

Articles of Association

In the bylaws must appear the company name; The social object, determining the activities that comprise it; the registered office; the social capital; the way of organizing the administration of the company and the way of deliberating and adopting its agreements in the collegiate bodies of the same.

With regard to the capital stock, the participations or shares into which it is divided, their nominal value and their correlative numbering must appear.

If the company is a limited liability company, it will express the number of shares in which it is divided the social capital, the nominal value of the same, their correlative numbering and, if they are unequal, the rights that each one attributes to the partners and the amount or extension of these.

If the company is a public limited company, it will express the classes of shares and the series, if they exist; the face value portion pending disbursement, as well as the form and the maximum term in which to satisfy it; and whether the shares are represented by titles or by book entries. If they are represented by certificates, it must be indicated whether they are registered or bearer shares and if the issuance of multiple certificates is envisaged.

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