When should I change from being autonomo to forming an SL company?

[TenerifeTeddy]

I would be interested in peoples opinions on when it would be sensible/more profitable/better to register a business as SL, rather than running as Autonomo. Should the decision be based on turnover and if so at what level? or ownership of assets like business premises etc.

I ran a company in the UK first as self-employed and then later as a Limited company and it was a fairly easy decision to reach. The permutations here seem much more complicated.

We currently run 2 businesses, both currently in rented locales. I have spoken with my accountant and he says not to do so until we purchase our own premises, but our turnover is such that we pay a lot in tax (in my view :)) so I wonder if going SL is viable, or if the extra accountancy costs would eat up any benefit.

What do you think? :confused:

[Balcony]

Can't fully speak for Spanish regulation, but in the UK it would be normal to set up separate limited companies for each shop, so that if one went pop the other may be safer. It might not protect you from the obligations under the lease, but does afford some protection from other creditors. Look at the tax advantages and where your money seems 'safer'.

[AL JAY]

Teddy if i were you i would contact forum member Goldenmaniac Diane will probably know whats best for you!


http://www.thinkspain.com/spain-listings/o10696

[9PLUS]

I thought SL company Taxation was more than Autonomo ?

[TenerifeTeddy]

I thought SL company Taxation was more than Autonomo ?

As Autonomo you are taxed at 20% of everything left after allowable deductions. Then as you know personal allowances are taken into consideration when the annual Renta is submitted.

[9PLUS]

S.L is 25% Taxation yeah ?

[TenerifeTeddy]

Thanks for that info, I thought the tax rate was actually lower :(. I have just been searching around and found this (http://www.gam-abogados.com/en/pros-and-cons-of-the-spanish-s-l/)article which is the first thing I have found which answers the questions simply.

I was better off in the UK as a limited company, but it doesn't seem to have the same advantages here.

[9PLUS]

The epigrafe for a school in the tax office comes with a full set of limitations, how much you can earn, how many employee you may have etc etc. If you can't work within those boundaries then there's a whole load of others.

Best go see an accountant.

x

[bonitatime]

We were told you need to be making more than 40.000€ profit for an SL to be viable
I can't comment but thats what we were told it as you were moving up a tax bracket and then it was better

[CIM]

I switched from Autonomo to SL last year. Gestor fees are slightly higher as is social security but overall tax savings should make it beneficial.

[TenerifeTeddy]

A few years ago when we only ran one business, our accountant said it worth changing to SL at 100K turnover, but more recently said when/if we purchase premises.
I would have thought it was more beneficial because the company pays the wages and Social Security payments of the (previous) Autonomo, and that is an expense against tax. Where as Autonomo, your drawings are part of your profit so are taxable. So even though the tax rate may be higher at 25%, there would be less profit to tax.

[KirstyJay]

I employ two people at present... which is soon to increase to about 4. I think it's still better for me to be autonomo. IT's a rocky road. Considering we are in the same 'sector' I would think you'd still be ok as autonomo for the moment... it depends on the hours your employees do.

On another note, I'd be interested in knowing your gestor charges and who you use. :) You can PM me this info though.

[TenerifeTeddy]

I employ two people at present... which is soon to increase to about 4. I think it's still better for me to be autonomo. IT's a rocky road. Considering we are in the same 'sector' I would think you'd still be ok as autonomo for the moment... it depends on the hours your employees do.

On another note, I'd be interested in knowing your gestor charges and who you use. :) You can PM me this info though.

Unable to PM so so sent you an email. :)

[slippyjim]

Obviously I don't know your exact situations but a while ago one of my clients went from Autonomous to a full SL and basically bankrupted herself within a year when business went downhill a bit, she said if she was still autonomous she could have ridden it out for much longer

[Iulia- Catalina]

Hi, if you want to be an autonomo or have a S.L. it depends of each business. If you just have a simple shop, and make 200 Euros a day, autonomo is the simplest way. But if for example you have a renting car company, or a restaurant, or a business that includes at least 5 employees, I would go for the S.L. If you have a good Gestor he will know how to make things so that your profit would be smaller. And if you reinvest some of the profit in certain things, then the tax will be just 12%. Secondly, you can balance the losses in at least 3 year, not mentioning the Amortization plan, which serves to recuperate your investment. And there are a ton of expenses that are considered deductible, and so your profit can grow even smaller. And, if anything happens, with Hacienda or personal creditors, they can only take what the S.L has, whether in the case of autonomo, they can take everything you own!
For persons that have real business, that more or less work (not crawl!) and S.L gives them more possibilities.