What is a limited liability company?

Entrepreneurship means being immersed in constant decisions. One of the first that you have to define as an entrepreneur is the choice of the legal form of the project, since it is a determining issue. What are the characteristics of the limited liability company, which is also identified through the acronym SRL? Next we tell you the main ones.


Characteristics of the limited liability company

One of the factors that most worries the person is the effect that a failure can have on their own finances. Through this format, liability is limited to the money contributed for this purpose. The minimum amount is 3,000 euros. Therefore, the sum of the contributions made materializes that commercial business idea, however, the legality of this type of society protects investors in economic terms when it comes to differentiating the company’s money from their personal assets. The data related to the names of the participants and the investments made must be recorded in a document.

The minimum amount required for a company of this type makes this capitalist model especially present in SMEs that are an important base of the commercial structure in Spain.



Number of participants

Just as the minimum capital required for a limited company is 3,000 euros, it can also be made up of a single participant. In that case, this proposal is called a sole proprietorship appealing to the individual nature of its management.

It can also be made up of several members who collaborate collectively as partners. They are responsible for the success of the idea in a common way. And, also, they assume uncertainty equally. For example, if there is any type of debt, what happens affects the contributions made at the beginning but the consequences of this event do not cross the border of the private.

This characteristic of the limited company converts this particularity into an added value to minimize the future accounting risk that transcends the entrepreneur’s own will.

Commercial Registry

Companies of this nature are listed in the Mercantile Registry through registration in this body that collects information related to this and other models of companies. If you have any questions about this issue it is recommended that you seek the advice of a lawyer or a notary to solve all your questions.

Society Constitution

Once the entrepreneur has decided that this will be the model chosen, it is time to shape it through the constitution through a document in which the data described earlier in this article (the number of partners and the money contributed). But, in addition, it is also worth listing the statutes that regulate this entity.

The choice of type of company responds, mainly, to the nature of the type of business. Depending on the main characteristics, it acquires a different format or another. However, the properties of the SRL make it an option demanded by those who wish to launch a commercial initiative.


by Abdullah Sam
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