There are different economic, legal or images sake reasons in order to choose between one or other form of trading.
You need to choose the legal form that best suits your needs.
Disclaimer: In the case of a self-employed, the liability is unlimited while limited liability companies´ liability is limited to the capital. Thus, when a limited company goes bankrupt, only respond with his possessions, and never will with the properties of their owners.
Financial requirements: A limited requires a minimum capital of € 3006.00.
Taxes: Self-employed individual can obtain directly the benefits of their business and be taxed in the income tax. However, the limited is taxed through corporation tax.
Number of members: More than one person trading together usually makes a company, although law envisages the possibility of one-person limited companies, consisting of a single person or entity.
Social Security and Taxes formalities: To commence a business as a sole trader is much faster and easier than opting for a limited company. As a self-employed you just need to register within the Treasure Department and start paying taxes and social security fees. As a limited company, you need to first establish the company- through the granting of a Notary deed and register it in the Commercial Registry- and also perform registration at Taxes and Labour departments, basically.
María Luisa de Castro
María founded CostaLuz Lawyers in 2006 and is the Firm’s Director. María is registered Lawyer number 2745 of the Cadiz Bar Association and is licensed to practice in all areas of law throughout Spain. Working closely with her team, María has developed the firm into one of the most highly regarded and trusted Spanish Law Firms acting for English speaking clients with legal problems in Spain.