LIMITED LIABILITY COMPANY BECAUSE SUCCESSIVE FORMATION (Sociedad Limitada Formación Sucesiva)

Today we are discussing about a new company form that has been incorporated by the recent entrepreneurs law.It is called Limited Liability Company because Successive Formation ( Sociedad Limitada de Formación Sucesiva –SLFS-).

Basically is similar to a normal Limited Liability Company (SL) , but the main difference about this new one is that the founders partners are not obliged to make an initial investment for the capital stock, so it may be contributed gradually. But to be applying this way, it must meet a number of specific obligations to ensure the protection of third parties in their financial, trade and labor .

The SLFS will be reshape into a normal SL once the minimum capital stock has been contributed, and the Corporations Law fixed this limit at 3000 €. But as we said, meanwhile the legal shape is as SLFS, the company must follow these rules :

• An amount at least equal to the 20 % of annual profits (with no limit), should be assigned to the legal reserve.
  
• Once such legal or statutory obligations have been faced, the dividends may only be distributed to the shareholders if the value of the net assets is, or as a result of the deal, does not lead to less than 60% of the minimum legal capital .
  
• The annual amount of the remuneration paid to administrators or partners for managing the company in those years may not exceed 20 % of net assets for that year , subject to the compensation they may be entitled as a hired worker of the company or through the provision of professional services agreed between the company itself and these partners and administrators.
  
• In case of dissolution of the company, voluntary or forced, if the assets of the company are insufficient to meet the payment of its obligations , the partners and administrators of the company will be jointly liable for the payment of the minimum capital stock amount established in the Law.
  
• It is not necessary to prove the reality of the monetary contributions of the partners in the constitution of SLFS companies will be jointly liable to company and corporate creditors against those contributions.

The statutes of constitution shall contain explicitly the SLFS condition and must be detailing the outstanding capital stock contributions and the contributions made in the constitution moment.

For further details do not hesitate in contact VP Advisers.