Once we have decided to start a business, we consider whether it is better to register as self-employed or to set up a limited company. Although these are the most popular types of companies in our society, it is advisable to analyse the other possibilities, as we may find a legal form that better suits our needs. To do this, you can consult the comparative table to clear up any doubts.

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If you have decided to create a Limited Company, do not forget to check our article: How to create a Limited Company.

Individual Self-Employed Entrepreneur:

• Is a physical person who carries out an economic or professional activity for profit on a regular, personal, direct, and self-employed basis, outside the scope of direction and organization of another person, with or without employees under their charge.

 

Limited Liability Entrepreneur:

• Physical person who, with limitation of liability under certain conditions, carries out an economic or professional activity for profit on a regular, personal, direct, and self-employed basis, outside the scope of direction and organization of another person, with or without employees under their charge.

 

Community of Goods (Comunidad de Bienes):

• The Community of Goods is constituted when the ownership of a property or right belongs pro-indiviso to several people and is part of a business activity carried out in common. It could be said that it is the simplest form of association between self-employed people.

 

Civil Society:

• A contract by which two or more people pool capital, with the purpose of sharing the profits among themselves.

 

Collective Society:

• A personalist commercial society in which all partners, under a collective name and under a corporate name, undertake to participate, in the proportion they establish, in the same rights and obligations, responding subsidiarily, personally, and jointly for social debts.

 

Simple Limited Partnership:

• A personalist commercial society defined by the existence of collective partners who contribute capital and work and respond subsidiarily, personally, and jointly for social debts, and limited partners who only contribute capital and whose liability will be limited to their contribution.

 

Limited Liability Company:

• A company in which the share capital, which will be divided into social shares, indivisible and accumulable, will be composed of the contributions of all partners, who will not be personally liable for the company's debts.

 

Successive Formation Limited Company:

• A company of a commercial nature, without minimum capital, with a regime identical to that of Limited Liability Companies, except for certain obligations aimed at guaranteeing adequate protection for third parties (for example, limits on the remuneration of partners and administrators or joint liability of the partners in case of liquidation).

 

New Enterprise Limited Company:

• It is a specialty of the Limited Company.

 

Corporation (Sociedad Anónima):

• A company of a commercial nature in which the share capital, divided into shares, is composed of the contributions of the partners, who are not personally liable for the company's debts.

 

Limited Partnership by Shares:

• A company of a commercial nature whose share capital is divided into shares, which will be formed by the contributions of the partners, at least one of whom will be in charge of the administration of the company and will be personally liable for the company's debts as a collective partner, while the limited partners will not have that liability.

 

Limited Liability Labor Company:

• Limited liability companies in which the majority of the share capital is owned by the workers who provide personal and direct paid services in them, whose employment relationship is for an indefinite period.

 

Labor Corporation (Sociedad Anónima Laboral):

• Corporations in which the majority of the share capital is owned by the workers who provide personal and direct paid services in them, whose employment relationship is for an indefinite period.

 

Cooperative Society:

• A company constituted by people who associate, in a regime of free entry and voluntary exit, to carry out business activities aimed at satisfying their economic and social needs and aspirations, with a democratic structure and operation.

 

Worker-Owned Cooperative Society:

• It is a company constituted by people whose object is to provide its partners with part-time or full-time jobs, through the common organization of the production of goods or services for third parties.

 

Professional Societies:

• It is that type of society that is constituted for the common exercise of a professional activity.

• It is a "professional activity":

The one that needs an official university or professional degree to carry it out, and registration in the corresponding professional college.

• There is "common exercise" when:

The acts proper to a professional activity are executed directly under the reason or corporate name.

The rights and obligations of the activity are attributed to the society, and the society is the holder of the legal relationship with the client.

 

Agricultural Transformation Society:

• Agricultural Transformation Societies (SAT) are civil societies with an economic-social purpose in terms of the production, transformation, and marketing of agricultural, livestock, or forestry products, the carrying out of improvements in the rural environment, agricultural promotion and development, and the provision of common services that serve that purpose.

 

Reciprocal Guarantee Society:

• Reciprocal Guarantee Societies (SGR) are financial entities whose main object consists of facilitating access to credit for small and medium-sized enterprises and improving, in general terms, their financing conditions, through the provision of guarantees to banks, savings banks, and credit cooperatives, Public Administrations, and clients and suppliers.

 

Venture Capital Entities:

• Venture capital is defined as those investment strategies that channel financing directly or indirectly to companies, maximize the value of the company generating management and professional advice, and divest in it with the aim of providing high capital gains for investors.
• The ultimate goal is aimed at getting the company to increase its value and once the investment has matured, the capitalist withdraws obtaining a profit.
• Venture capital entities (VCE) and closed-ended collective investment entities (EICC) are grouped under the same regulations and share the following interests:

• Obtaining capital from a series of investors to invest it in accordance with a defined investment policy.
• Holding the consideration of closed-ended based on their divestment policies (divestments occur simultaneously for all investors or participants, and what is received by each investor is based on the rights corresponding to each of them).

 

Economic Interest Grouping:

• A commercial society whose purpose is to facilitate the development or improve the results of its partners' activity. Its objective will be limited exclusively to an auxiliary economic activity of that developed by its partners.