What is a Professional Limited Company?

A Professional Limited Company (SLP), from the Spanish Sociedad Limitada Profesional, is a legal structure designed to allow registered professionals to practise their activity jointly under the framework of a limited company.

It combines the advantages of a commercial company, such as liability limited to the capital contributed, with the provision of professional services, ensuring that the partners comply with the legal and professional regulatory requirements of their profession.

This structure is governed by Law 2/2007 of 15 March on professional companies, which establishes specific rules for its incorporation, operation and administration. Its primary objective is to organise the joint provision of professional services, enabling efficient management and greater legal certainty in the face of the risks inherent in professional activity.

Main characteristics:

• Partners must be duly registered with the relevant professional body for the activity they practise.
• At least 51% of the share capital and voting rights must belong to professional partners.
• The liability of partners is limited to the capital contributed, except in cases of professional negligence.
• It may encompass several professional specialities, provided they are not incompatible.

SLPs are common in sectors such as law, medicine, engineering, architecture and dentistry, among other professions requiring professional registration.

Advantages of an SLP

Forming an SLP offers multiple benefits:

1. Limited liability: Partners do not respond with their personal assets for the company’s debts, except in cases of negligence or breach of professional regulations.
2. Professional image and credibility: A company formed by several professionals projects greater seriousness and trust towards clients and third parties.
3. Organisation and efficiency: It facilitates the management of professional activity and enables a clear structure for administration and division of responsibilities.
4. Tax advantages: SLPs are taxed under Corporation Tax (25%), with access to deductions for R&D, training or investments, as well as deductible expenses related to professional activity.
5. Flexibility in the number of partners: There is no minimum or maximum number of partners; it can even be constituted as a sole-partner company.
6. Sharing of expenses and resources: Sharing resources such as offices or equipment reduces individual costs and improves business operations.

Disadvantages and limitations

Whilst the SLP offers advantages, it also has certain drawbacks:

• Formalities and incorporation costs higher than a conventional limited company.
• Strict regulation on the composition of partners and the relationship with the professional regulatory body.
• Professional liability: in cases of negligence, partners may be liable with their personal assets.
• Right of pre-emption: existing partners have priority in the purchase of shares, which may hinder the entry of new partners.
• Access to credit: some banks may consider limited liability as lesser security for loans.

Requirements for incorporating an SLP

To create a professional limited company, the following requirements must be met:

1. The company must have as its sole purpose the joint exercise of professional activities.
2. The partners must be registered with the relevant professional body and hold the majority of the share capital and voting rights.
3. The management must be composed predominantly of professional partners.
4. The company’s activity and name must be registered in the Companies Registry, including the suffix S.L.P., and in the Register of Professional Companies of the relevant Professional Body.
5. It must be incorporated by means of a public deed before a notary and a minimum share capital of €1 must be deposited.
6. The company must be registered with the Tax Authority and with the RETA (Special Scheme for Self-Employed Workers) if the partners are not previously registered as self-employed.

Failure to comply with these requirements may result in the automatic dissolution of the company.

When is it advisable to create an SLP?

This type of company is recommended when registered professionals wish to join together to offer services jointly, benefiting from:

• Protection of personal assets.
• Greater competitiveness and market presence.
• More efficient and professional internal organisation.
• Possibility of taking advantage of tax benefits compared to self-employment.

Taxation of the SLP

• Taxed under Corporation Tax (25%).
• Can deduct expenses related to professional activity, including rent, utilities, salaries and office materials.
• Withholdings on account of Personal Income Tax (IRPF) applicable to partners for dividends, salaries or professional fees.
• Access to deductions for investment, training or R&D.

How partners of an SLP are paid

Partners can receive income in various ways:

• Dividends: proportional to participation in the share capital, subject to withholding of 19% under Personal Income Tax.
• Remuneration for professional services: fees subject to withholding of 15% under Personal Income Tax.
• Salary: for management and administrative functions, with Social Security contributions as an employee.

The Professional Limited Company (SLP) is an ideal option for professionals who wish to practise their activity in an organised manner, with legal certainty and tax advantages, whilst always complying with the legal and professional regulatory requirements that this structure demands.

At Blegal, our commitment is to offer a comprehensive and close service. We work with dedication and energy to ensure your satisfaction, attending to any legal, tax or employment law need. Furthermore, our portfolio of services goes beyond traditional administrative management, including property administration and insurance broking, all under one multidisciplinary team.

Our professional and diverse team works closely together to ensure that each client receives exactly what they need. With a future-oriented vision, we accompany the growth of your business and adapt to your needs: at our offices, by telephone, e-mail or video conference, you can always count on Blegal.

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