The partnership is one of the legal forms to begin business activity in Spain. A partnership is a simple association between persons with a common entrepreneurial project. The advantages and disadvantages that partnerships offer are similar to autonomous employees. Its advantages include the simplicity of its creation, management, and dissolution as well as the minimum cost of processing its acts and the absence of a minimum share capital requirement. Its disadvantages include the unlimited responsibility of the partners so that debts the company incurs transcend to the partners’ personal assets.
A partnership is a private collaboration contract between two or more persons who wish to jointly carry out for-profit activity. These persons may opt to provide work, which makes them “working partners,” and property or money, which makes them “capitalist partners.”
Despite being called a company, a partnership lacks a legal personality and is not considered a commercial company. Its members must pay personal income tax rather than company taxes.
However, even if a partnership has communal assets, these are expressly established to participate in the commercial market to obtain profits while each of the partners contributes the needed goods, money, and work.
Like joint properties, partnerships are a recommended option for small businesses that do not require investments and prefer simple management.
The Spanish Commercial Code governs partnerships in commerce matters and in relation to rights and obligations.
This article is not considered as legal advice