Unit 2 Flashcards
Individual company (the first type of business)
Sole entrepreneur do it all, decisions, risk, everything.
Then… trading companies started, what is that?
A legal association that has rights and responsibilities, a name, nationality and its own capital.
Spanish legal/trading companies: (7 types)
Partnerships: - General (1) - Limited - divided into simple (2) and por acciones (3) Capitalistas: - Sociedad anonima (4) (Inc, Corp.) - Sociedad de responsabilidad limitada (5) (Ltd.) Other non-trading types: - Sociedades laborales - Sociedades cooperativas (coop.)
Personalista vs capitalista:
P can add just their own knowledge and capital but in C you can attract other people to invest in your business making it able to grow in a total different manner.
- General Partnership
- responsibility?
- management?
- partners?
- transferrable partnership?
- liquidation?
- name?
Family business, not common nowadays. Unlimited responsibility for all partners, no matter size of contribution - same applies tot he rights. Distribute management as you want, few for faster decisions. Capital partners (goods) + industrial partners (knowledge, work).
Partnership non-transferrable (unless full agreement). Liquidation agreed by all.
Name: the partners’ names + Cia. (`compania´)
- Limited Partnership, simple
- responsibility?
- management?
- partners?
- transferrable partnership?
- liquidation?
- name?
Two types of partners: collective and silent, where the collectives have unlimited responsibility and the silent are responsible for their contribution.
A new way of general partnership for making it easier to attract capital. Only the collectives can manage the company.
Same rules for transfer of partnership, liquidation and the name.
- Limited Partnership, por acciones
- what is different from the simple form?
Same as simple form but here the contribution is represented by shares and it must start with 60 000 €. Same type of partners.
The big difference is that the silent partners now make all the big decisions and the collectives manage the firm on a daily basis dependant on those decisions.
The partnership is transferrable since you can sell your shares without agreement.
- Sociedad Anonima
- starting capital?
- owner?
- rights/responsibility?
- managers?
- Insight in company managers vs shareholders?
Most advantageous form for big capital needs.
Corporation (aktiebolag) with at least 60 010€ in starting capital (>25% paid initially). Can have 1 owner or more, legal person so either a physical person or another company.
My responsibility, rights, voting weights etc all depends on your share of the capital (stocks). Transferrable partnership.
The managers are chosen by the shareholders and can be shareholders too.
Shareholders take big decision on the GM but have less insight in the company. Preferably the managers should have shares as well so that their salary is somewhat based on the value of the shares –> sharing interests.
- Sociedad de responsabilidad limitada
Most advantageous form for small companies. Capital at least 3005€ and at least 1 partner. A much more simple form and structure than SA. Responsibility and rights linked to contribution. Democratic = decision based on capital majority. Transferrable partnership. Managers can be chosen by participants (here the capital is divided by participants, not shares, and you can have different numbers of participation papers in equal size).
Naming: SRL.
- Sociedades laborales
Can take the form of SA or SL, just adding “laboral” in the name. Follows the law for SA. This form is applicable to firms where at least 51% of the undefined workers are owning it, but no single can own more then 1/3.
The sum of the hours worked by non-partners must be less than 15% of the workload of the partners.
- In crisis this form is a solution for keep working.
- 10% of profits to reserves
- tax benefits
- public entities can be partners
- Sociedades cooperativas
Association of people aiming for socio-economic goals - profits to reserves or society.
Jointly-owned and democratic control.
1st degree= when it is owned by both physical and legal persons, public or private.
2nd degree= when it is owned by other cooperatives.
General Meeting of shareholders:
Once a year (ordinary) in the 1st semester.
Main decision organ, agreements based on capital majority. Decisions concerning the distribution of profits, increase or reduce capital, mergers, new market entrance etc.
Extraordinary meeting if 5% of capital requires or if the management decides to have it.
Universal meeting if all shareholders agree.
1st call, 25% of capital must attend, otherwise a 2nd call. Announcements in the newspaper and Mercantile Register 15 days before
General Meeting of shareholders:
When?
Decisions?
Calls?
Once a year (ordinary) in the 1st semester.
Main decision organ, agreements based on capital majority. Decisions concerning the distribution of profits, increase or reduce capital, mergers, new market entrance etc.
Extraordinary meeting if 5% of capital requires or if the management decides to have it.
Universal meeting if all shareholders agree.
1st call, 25% of capital must attend, otherwise a 2nd call. Announcements in the newspaper and Mercantile Register 15 days before
Board of Directors
Styrelsen. Can meet whenever they want and have the best insight in the company. Internally they run the daily business based on the shareholders’ decisions and externally they represent the company.
Management tools (3)
- Balance sheet: Assets, equity and liabilities
- Profit-loss statement: how the profit/loss was created during the year.
- Memory: annual report with extra notes.
These tools are controlled and hopefully approved by an external auditor (for credibility).
When is an auditor not needed?
If 2 out of these 3 are met:
- Total assets < 1.4M€
- Sales < 2.88M€
- Workers < 50
3 other types of statements:
Equity changes, capital variations and the non-economic report.
GM difference between SA and SRL/SL:
The basics are the same with GM, the participants/shareholders make the big decisions and the managers then run the firm based upon them. BUT here the validitation of the decision requires 1/3 of the participants attendance, but in SA there were 25% limit.
Sociedad Limitada nueva empresa
- How is it simplified?
- Partners?
- Tax?
New form of SRL even more simplified to help start-ups.
startin capital 3005-120 000€ so here is a maximum. Also partners max 5. Naming: SLNE.
Partners only physical people. Can start up online, no papers needed. Only money contributions, no apport.
Tax advantages and simplified accounting.
Mutual Guarantee Company
Approved by the Ministry, company owners merge together and help each other with resources making use of mutual benefits. Limited responsibility, law as SA.
Min capital: 10 000 000€ (huge!) And minimum partners =150st.
