Since the entry into force of Act 18/2022 of 28 September on the creation and growth of companies – also known as the “Crea y Crece Act” – the question of the possibility of setting up a limited liability company (SRL) with a minimum share capital of one euro has become legislatively clear, according to the interpretation of the Dirección General, set out in its Resolución of 13 June 2013 (BOE 10 July 2023), the reading of which is recommended to anyone interested in this matter.
However, practical and registry doubts have arisen when such capital is represented by a single shareholding.
The recent criterion of the Dirección General, set out in its Resolución of 29 October 2024 (BOE 22 November 2023) has clearly addressed this issue, resolving an appeal lodged against the refusal of a commercial registrar to register the incorporation of a limited company with a capital of 1.00 Euro represented by a single shareholding.
The company Phytoma Cropscience, S.L. was incorporated as a sole shareholder with a share capital of EUR 1, represented by a single share of the same nominal value. The Commercial Registrar III of Valencia refused to register it on the grounds that such a configuration would infringe the ‘principles of the company type’, in particular
- the need for a system of majorities (Art. 200 LSC), since 1 shareholding leads to an inevitable system of unanimity; however, the single-member company, which is absolutely legitimate, would incur such a circumstance since its sole shareholder does not even adopt “resolutions” but “decisions” (Art. 15 LSC)
- the risk of supplanting the statutory regime in the case of co-ownership of the shareholding; since there is only 1 shareholding, the rules of the Community of Property (art. 126 LSC, in relation to arts. 392 et seq. CC) should apply in preference to those of the company; however, the statutory regime of a company with a plurality of shares is also partially suspended during its single-member status, given that its provisions on the transferability of shares, majorities necessary for agreements and resolution of conflicts, among others, are inapplicable. And if the sole shareholder regime can be transitional, the existence of a single shareholding, which can be modified through the creation of new ones, can also be transitional
- contravention of the restriction on the transferability of shares (Art. 108 LSC); however, as indicated in the previous section, this would not so much be a contravention as the practical impossibility of application. The company regime would be replaced by the restriction on the transferability of the share in the community of property in favour of the co-owner (Art. 1522 CC), which fulfils an analogous economic function.
- The lack of statutory coherence in the face of a single shareholding; finally, this objection must be answered with the reasoning set out for the single-member company. Although Article 23.d) LSC refers to a plurality of “shareholdings”, it does not expressly prohibit the existence of a single shareholding, and there is no evidence of any prejudice to third parties that could hinder the autonomy of the will due to a breach of the principles that shape the limited company (Art. 28 LSC)
For those reasons, the Dirección General revokes the registration, adding that the hypothetical risks assessed by the commercial registrar do not justify restrictions on the freedom of choice in company matters. Neither the possible system of joint ownership of a single shareholding nor the system of transfer justifies a restriction on the freedom to set up the capital. The law provides for both cases with specific rules (sections 108 and 126 LSC). The rejection by the registry has no legal basis if it is based exclusively on an extensive interpretation of the so-called “principios configuradores”, without any mandatory rules to support it.
This ruling confirms that it is legally valid to set up a limited company with a capital of 1 euro divided into a single shareholding, provided that this corresponds to the will of the founding shareholder and is expressly stated in the articles of association. This doctrine also recognises the practical value of the use of CIRCE and standardised models to promote agility in company formation, even with simple structures such as the one discussed here.