Liquidation of the company in Spain

The liquidation of a company in Spain is a complex process that is similar in its essence to the procedure of liquidation of a company in Ukraine, but requires an understanding of local Spanish legislation, knowledge of procedures and quite careful planning of all stages.

In this article, we, JK “Prikhodko and Partners”, will share practical advice on the liquidation of companies in Spain, consider the key aspects of this process and offer alternative solutions for your business.

Types of companies in Spain according to current local legislation

Before starting the liquidation process, it is important to understand what type of company you are dealing with.

There are several main types of companies in Spain, which we will list below:

1. Sociedad Limitada (SL)– Limited liability: This is the most common type of company in Spain, similar to the Ukrainian LLC (limited liability company). Owners are liable only to the extent of their contributions to the authorized capital.
2. Sociedad Anónima (SA)– Joint-stock company: This form is more suitable for large enterprises that plan to raise capital through the sale of shares. The liability of shareholders is also limited by their contributions.
3. Sociedad Civil (SC)– Civil partnership: It is created to conduct a joint business by several partners, each of whom is responsible for obligations in proportion to their shares.
4. Autónomo– Sole proprietorship: This is a form of doing business without creating a separate legal entity, which is suitable for freelancers and self-employed persons.

Each of these types has its own characteristics that affect the liquidation procedure. We, as the Law Company “Prikhodko and Partners”, recommend that you familiarize yourself with the characteristics of your company in detail before starting the liquidation process.

Liquidation procedure according to current Spanish legislation

The process of liquidating a company in Spain can vary depending on the type of company and the reasons that led to the decision to liquidate.

However, common stages include:

1. Making a decision on liquidation: This decision is taken at the general meeting of shareholders or partners of the company. The decision must be recorded in the protocol.
2. Appointment of liquidator: Once the decision has been made, a liquidator must be appointed who will be responsible for all aspects of the liquidation, including the repayment of debts, the distribution of assets and the settlement of legal liabilities.
3. Notification of state bodies: The company must notify the tax authorities, social services and the commercial register about the start of liquidation.
4. Repayment of obligations: The liquidator must conduct an audit of the company to determine all assets and liabilities. All debts must be repaid before the remaining assets are distributed to shareholders.
5. Closing accounts and registrations: After completing all the procedures, the liquidator submits a report to the commercial register and the company is removed from the register.

If you decide to liquidate the company, the specialists of Prikhodko and Partners Law Firm will be able to help you at all stages of this process in order to effectively obtain a result and avoid legal and financial risks.

How to start the liquidation procedure

Starting a liquidation requires careful planning.

Basic steps to get started:

1. Financial analysis: Before starting the liquidation procedure, it is important to assess the financial condition of the company, including assets, liabilities and possible risks.
2. Consultation with lawyers and accountants: We recommend at this stage to consult with the specialists of the Law Company “Prikhodko and Partners” in order to understand all the legal and tax consequences of the liquidation.
3. Preparation of documentation: Preparation of all necessary documents, including liquidation decision, appointment of liquidator and notification of state authorities.
4. Submission of documents to the commercial register: After preparing all the documents, it is necessary to submit them to the commercial register for the official start of the liquidation process.

Alternative solutions for the liquidation of the enterprise

Liquidation is not always the only solution.

There are alternatives that may be more profitable for the company:

1. Sale of business: If the business has value, it can be sold, preserving the assets and securing the future of the company.
2. Mergers or acquisitions: Another option is a merger with another company or a takeover, which can help preserve the business and provide new opportunities for growth.
3. Restructuring: If a company is in trouble, it may be worth considering restructuring instead of liquidation. This may include changing the debt structure, selling part of the assets or changing the direction of the business.

We, JC “Prikhodko and Partners”, always recommend considering all possible options before deciding on liquidation in order to find the most profitable way out of the situation.

Conclusion

Liquidation of a company in Spain is a complex and multi-stage process that requires a detailed approach and understanding of local legislation.

Our specialists have extensive experience in providing services for the liquidation of companies and are ready to help you in this process.

Contact us for advice to ensure the successful completion of your business in Spain.