Loss of sole proprietorship status: Entry of partners into a sole proprietorship company
As specialists in commercial and single-member company services, today we want to explain to you what the loss of single-member status means in this type of companies and how it is processed in our Notary Office in Barcelona.
What is a sole proprietorship?
The main characteristic of a sole proprietorship is that all the shares or stakes of the company rest with a single person (natural or legal) who has full ownership of a business, as they own all the share capital.
What is the loss of unipersonality?
The loss of sole proprietorship of a company occurs when it changes its structure and comes to have several shareholders or partners to whom the existing shares and participations are also partially transferred. There are different reasons why this can happen in a company formed by a single person, among them:
- Financing needs: as an option to expand the business, make significant investments, or avoid going into debt.
- Distributing financial risks among several people.
- Incorporating specialists from the sector.
- Projecting a better image of the company in the market.
- Changes in business strategy.
- Growth and success of a company.
The change from sole proprietorship to multiple ownership implies the loss of sole proprietorship of a company, so a deed of loss of sole proprietorship must be signed before a Notary.
This procedure is regulated in articles 13 and 14 of the Capital Companies Act and the regulations of the Mercantile Registry and the Notary Public that govern these provisions.
How is the declaration of loss of unipersonality processed?
As Notaries in Barcelona for the declaration of loss of unipersonal status, we want to explain more about this process, which you can now handle online. This means that you can contact us wherever you are to carry out your procedure through a fully digital signature, from anywhere in Spain, without any need to travel.
Therefore, whether it is a face-to-face signature or the online declaration of loss of unipersonal status, you must contact a notary office to grant the corresponding public deed, which must always be signed before a Notary.
Deed of loss of sole proprietorship status
The Notary will formalise the new shareholders' agreement by which one or more partners are included and will prepare the deed. It must reflect the identity of the new partner and the date of the acquisition or transfer of shares, among other details.
Cessation of sole proprietorship in the Companies Register
Subsequently, this deed must be sent to the Mercantile Registry, with the aim of recording that it is a sole shareholder company.
At JLA Notarios we offer a comprehensive service in managing deeds signed at our notary office, so if you wish, we can also manage the registration of your deed of loss of sole shareholder status in the Registry on your behalf. Therefore, we can handle all the procedures for you, whether you have signed your deed of loss of sole shareholder status personally at our notary office in Barcelona or digitally from anywhere in Spain.
What is the price of the deed of loss of sole proprietorship?
The price of notarial acts is regulated by the Government and complies with the regulatory framework of the Notarial Fee Schedule, so the exact price cannot be calculated until its specific content is known. If you wish to receive a detailed quote, we invite you to contact us directly. As a guideline, we can inform you that according to the current regulatory framework, the usual cost of the Notary for formalising the declaration of loss of sole proprietorship is around €140-150, including VAT. This indicative price is calculated for a document of usual content and includes the issuance of a single authorised copy and one simple copy.
What other consequences does the cessation of single-member status have in companies?
After this social agreement, the companies:
- Do not alter their organisational structure.
- It is not necessary to dismiss the company director if they are the sole shareholder.
- The company documentation will no longer state S.L.U or single-member S.L, but simply S.L.
It should be remembered that if the owners of shares or participations holding 25% or more of the share capital are changed, it will be necessary to grant, in addition to the deed of loss of personality, a Real Ownership deed.
You can learn more about the directors of a company in this blog article:
Loss of Sole Proprietorship in your Notary Office in Barcelona
At our notary office, we efficiently manage the loss of single-person status, ensuring a swift process both in person and through digital signature via our Notaria Online.
Trust us to provide personalised service and resolve any legal doubts you may have. We hope this article about what the loss of single-person status is has been helpful to you.
We look forward to advising you! Do not hesitate to contact us by phone at 931591762, through our contact form or by sending an email to bcn@jlanotarios.com! We will be delighted to assist you.
