# Limited Liability Companies (S.L.)

Business I · Business Law · https://tryals.app/learn/business-i/limited-liability-companies-s-l

## Spain's Workhorse Company

The **sociedad limitada (S.L.)** is the dominant legal form for Spanish small and medium ventures. **Formation** requires a public deed before a notary and registration in the Commercial Registry.

The minimum **capital** is **3,000 euros**, fully paid up. Capital divides into **participations**, equal units that are **not securities** and cannot be listed on an exchange. 

Partners enjoy **limited liability**, risking only their contribution. However, banks routinely demand **personal guarantees** for loans, bypassing this shield.

| Organ | Function |
| --- | --- |
| **General meeting** | Assembly deciding accounts, dividends, and changes |
| **Administrators** | Manage daily business and represent the company |

Transfers of participations to outsiders face **preferential acquisition rights** to keep control closed.

## Power and Money Inside an S.L.

Owning participations grants two bundles of rights: **economic rights** (dividends, liquidation quota, and **preferential assumption** against **dilution**) and **political rights** (voting, information, and challenging abusive resolutions).

> **Key rule:** Ordinary decisions need a simple majority, while structural changes demand reinforced majorities.

A **common pitfall** is assuming profits automatically become dividends; the general meeting decides whether to distribute or retain earnings.

With **5 percent** of capital, minority partners can call meetings and demand audits, proving that percentages dictate power in an S.L.

## Practice questions

8 of this lesson's 14 practice questions, with answers. The full set is in the app.

### 1. Which statements about S.L. participations are correct?

A. Transfers to a partner’s spouse or children are free by default
B. They are securities freely tradable like shares
C. They cannot be listed on a stock exchange
D. They are equal and indivisible parts of capital

**Answer:** A. Transfers to a partner’s spouse or children are free by default; C. They cannot be listed on a stock exchange; D. They are equal and indivisible parts of capital

**Why:** Participations are precisely *not* securities, no listing, no free float. Family and fellow partners are the default free-transfer circle.

Page: https://tryals.app/practice/business-i/limited-liability-companies-s-l/which-statements-about-s-l-participations-are-correct

### 2. An S.L. has 10,000 participations and Marta owns 3,400. A 50,000€ dividend is declared. How many euros does Marta receive?

**Answer:** 17000 (within ±10)

**Why:** $34\%$ of 50,000€ = **17,000€**. Economic rights track capital arithmetically, the ownership ledger *is* the payout formula.

Page: https://tryals.app/practice/business-i/limited-liability-companies-s-l/an-s-l-has-10-000-participations-and-marta-owns-3-400-a-50-000

### 3. An S.L. doubles its capital with new participations. A founder holding 20% does **not** exercise her preferential right. Set the slider to her stake after the increase (%).

**Answer:** 10 (within ±1)

**Why:** Same holding over twice the capital: **10%**. Dilution is silent, no one took anything from her; the pie simply grew around her. Preferential assumption exists precisely to let her keep pace.

Page: https://tryals.app/practice/business-i/limited-liability-companies-s-l/an-s-l-doubles-its-capital-with-new-participations-a-founder

### 4. Complete the S.L. capital rule.

**Answer:** The classic minimum capital of an S.L. is **3,000** euros, divided into **participations**.

**Why:** 3,000€ in participations, versus the S.A.’s 60,000€ in shares. The numbers and the units are both exam classics.

Page: https://tryals.app/practice/business-i/limited-liability-companies-s-l/complete-the-s-l-capital-rule

### 5. Sort each partner right by its bundle.

**Answer:**

- Economic right: Receiving declared dividends, Liquidation quota on winding up, Subscribing new participations pro rata
- Political right: Voting at the general meeting, Examining the accounts before the vote, Challenging an unlawful resolution

**Why:** Money rights (dividends, quota, anti-dilution) and power rights (vote, information, challenge), every participation carries both bundles.

Page: https://tryals.app/practice/business-i/limited-liability-companies-s-l/sort-each-partner-right-by-its-bundle

### 6. Match each S.L. feature to its description.

**Answer:**

- Participation → Equal, indivisible unit of capital, not a security
- Preferential acquisition → Insiders’ first option when a partner sells out
- Reinforced majority → Extra consent demanded for structural changes
- Limited liability → Partner risk capped at the contribution

**Why:** Closed capital, protected insiders, guarded big decisions, capped risk, the S.L.’s four design choices in one table.

Page: https://tryals.app/practice/business-i/limited-liability-companies-s-l/match-each-s-l-feature-to-its-description

### 7. A partner wants to sell her participations to an outside investor. What does the default legal regime say?

A. Existing partners have preferential acquisition rights
B. Only the administrators can authorize her personal sale
C. Sales to outsiders are absolutely void
D. She may sell freely to anyone, like listed shares

**Answer:** A. Existing partners have preferential acquisition rights

**Why:** The default regime restricts outsider transfers: the remaining partners (or the company) may take the participations on equal terms first. The S.L. protects its cast of characters, that is its point.

Page: https://tryals.app/practice/business-i/limited-liability-companies-s-l/a-partner-wants-to-sell-her-participations-to-an-outside-investor

### 8. The S.L. restricts transfers of participations by default while the S.A. allows shares to move freely. What difference in purpose does that encode?

A. The restriction protects S.L. creditors, who cannot pursue new partners
B. The S.A. is listed on markets, which legally requires free transfer
C. The S.L. has lower capital requirements, which makes transfers riskier
D. The S.L. is built for partners who chose each other

**Answer:** D. The S.L. is built for partners who chose each other

**Why:** *Intuitu personae*, the identity of the co-owners is part of the bargain in a small firm, and the pre-emption right lets the others buy rather than accept an unknown partner. The S.A. faces the opposite problem, since capital from strangers requires an exit they can use.

Page: https://tryals.app/practice/business-i/limited-liability-companies-s-l/the-s-l-restricts-transfers-of-participations-by-default-while-the