Define: S.L.

S.L. stands for “Sociedad Limitada,” which is a type of limited liability company commonly used in Spain and other Spanish-speaking countries.

An S.L. is a limited liability company, which means that the liability of its shareholders is limited to the amount of their investment in the company. This provides protection for personal assets in case of company debts or legal issues.

To establish an S.L., you typically need at least one shareholder, a minimum share capital, a registered office address, and the drafting of articles of association. The specific requirements may vary depending on the country or jurisdiction.

Yes, foreigners can establish an S.L. in countries where it is allowed. However, there may be additional requirements or restrictions for foreign shareholders, such as obtaining a valid visa or residency permit.

Some advantages of forming an S.L. include limited liability protection, separate legal entity status, ease of transferability of shares, and the ability to attract investors or partners.

Some potential disadvantages of forming an S.L. include higher administrative and compliance costs compared to other business structures, the need to maintain proper accounting records, and potential restrictions on the transferability of shares.

The tax treatment of an S.L. can vary depending on the country or jurisdiction. Generally, an S.L. is subject to corporate income tax on its profits, and shareholders may also be subject to personal income tax on any dividends received.

In some cases, an S.L. can be converted into a different type of company, such as a public limited company (S.A.). However, the conversion process may involve certain legal requirements and approvals.

Yes, an S.L. can be dissolved or liquidated voluntarily by the shareholders or involuntarily by a court order. The process typically involves settling any outstanding debts, distributing assets, and canceling the company’s registration.

In case of liquidation, the shareholders’ investment in the S.L. is typically used to settle any outstanding debts or liabilities. If there are remaining assets after the debts are paid, they may be distributed among the shareholders according to their ownership percentage.