If you are considering starting a business in Spain, you face an important choice between two common business structures: working as an Autónomo (self-employed) or establishing a Sociedad Limitada (SL), similar to a limited liability company.

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Both options have their own advantages and disadvantages that can affect your business operations, financial situation and legal responsibilities. Use our calculator to find out which option best suits your situation: a Sociedad Limitada (SL) or working as an Autónomo.

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Autónomo

Advantages:

1. ‍Easyand quick incorporation: The process of registering as an Autónomo is relatively simple and can often be completed within a few days.
   
2. ‍Lowerinitial cost: No minimum start-up capital is required, which is ideal for entrepreneurs with limited financial resources. Administrative costs are also lower because there are fewer legal formalities.‍
   
3. Fewer administrative obligations: As an Autónomo, you face fewer accounting obligations. You do not have to file financial statements and accounting is generally less complex.
   

Disadvantages:

1. ‍Unlimitedpersonal liability: You are personally responsible for all debts and obligations of your business. This means your private assets, such as your home or savings, could be at risk if your business experiences financial difficulties.‍
   
2. Higher tax rates at higher incomes: Although income tax (IRPF) is progressive and can be beneficial at lower incomes, rates can increase significantly the more you earn, leading to a higher tax burden compared to an SL.‍
   
3. Less professional image: Some clients and suppliers may take an incorporated company more seriously, which may affect business opportunities and collaborations.
   

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Sociedad Limitada (SL).

Advantages:

1. ‍Limitedliability: Your personal assets are protected because the SL acts as a separate legal entity. You are liable only for the amount you invested in the company.‍
   
2. Tax benefits for higher profits: An SL pays corporate income tax (Impuesto sobre Sociedades), which is often lower than the highest income tax brackets for Autónomos. This can be more fiscally advantageous if your company generates high profits.‍
   
3. Professional appearance: Having an SL can increase the confidence of customers, suppliers and investors, as it is perceived as a more established and stable business structure.
   

Disadvantages:

1. ‍Complexand expensive to set up: Setting up an SL requires more time and money. You have to draft articles of association, have a notarized deed drawn up and register in the Commercial Register (Registro Mercantil).‍
   
2. Required start-up capital: A minimum start-up capital of €3,000 is required, which must be paid up at incorporation. This may be an obstacle for entrepreneurs with limited resources.‍
   
3. More administrative and accounting obligations: An SL must keep extensive financial records, prepare financial statements and file them with the Commercial Register. This may lead to higher costs for accounting services.
   

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