Conversion from an Autonomous worker to a Limited Company

Converting from an autonomous worker to a limited company is an alternative that arises as the annual turnover figure, and thus the taxes to be paid, increase.

The moment of changing from an autonomous worker to a limited company is not susceptible to mathematical calculations, but, rather, depends on each specific situation. Generally, some of the motives that drive the adoption of a corporate model are:

  • Annual revenues above 40.000 €
  • Protection of personal assets
  • Ease of working with large companies
  • Agility in obtaining bank loans
  • Formalization of relationships with regular collaborators
  • Business growth

Notwithstanding the above, it will be necessary to study each specific case in depth in order to determine the convenience of changing the legal form of the company.

Steps to convert an autonomous worker to a limited company

  • Request withdrawal from the Special Regime of Autonomous Workers (RETA).
  • Request the name of the company. Request the negative certificate of company name from the Central Mercantile Registry, which affirms that the name selected for the company is not already in use.
  • Open a bank account in the name of the limited company and deposit the initial capital minimum, that is, 3.000 euros.
  • Draft the corporate bylaws. These are the norms that will guide the company and will be incorporated into the public deed of incorporation that will be signed later.
  • Sign the public deed of incorporation.
  • Go to the Tax Agency to request:
    • Provisional Tax Identification Number (NIF) of the limited company
    • Final labels and cards
    • Membership in the Census of entrepreneurs, professionals and retainers
    • Membership in the Tax on Economic Activities (IAE)
    • Make the census declaration (IVA). Register the limited company in the Mercantile Registry of the province where it has its registered office.
  • Go to the General Treasury of Social Security to request:
    • Membership in the Social Security for all the administrators and partners of the limited liability
    • Number of employees in order to, if necessary, hire workers
    • Additionally, if you are going to need a location, you will have to request the opening license from the City Council.
  • Go to the Tax Agency to exchange the provisional NIF for the definitive one

Finally, take into account that the accounting obligations corresponding to limited companies completely differ from those as autonomous.

If you consider the possibility of converting from an autonomous worker to a limited company, do not hesiate to contact us.

For further information regarding the conversion to a limited company in Spain,

Please note that this article is not intended to provide legal advice.

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