Have you ever considered the possibility of becoming a catering entrepreneur? If so, the following comments may be helpful. The first decision you must take is the liability you are willing to assume with respect to your business. If you choose to work on a freelance basis, all your personal and business assets shall be liable. However, if you choose to incorporate a limited liability company, liability will be restricted to the assets provided.

If you decide to incorporate a limited liability company you must follow these steps to incorporate and start up the same:


1.)Company name

The Main Companies Registry shall certify that the name given to the company does not coincide with another previously existing name. To do this, a writ must be filed requesting a negative certificate of the name, indicating the names chosen up to a maximum of three. The certificate shall remain in force for a period of 2 months.

With respect to the above, there is a possibility of recording a trademark, commercial name or shop sign before the Spanish Patent and Trademark Office. In order to protect a catering business, we recommend recording a commercial name or shop sign. Please note that the name selected need not coincide with the name of the company exploiting the business.

Another possibility is to request a domain on the Internet (“.es”). To do this, the corresponding request must be filed before the ESNIC. Companies may record their company’s full name or abbreviation, preferably if it is recorded at the Spanish Patent and Trademark Office or one or more commercial names or trademarks are also recorded at the Patent and Trademark Office or at the Office for Harmonisation of the Internal Market. Individuals may only be assigned a domain that coincides with commercial names or trademarks previously recorded and held by the same.

2.) Drafting the public deed of incorporation and by-laws

Usually, a lawyer shall draft the document where the parties agree to incorporate a company, establishing the rules applicable to its activity. The by-laws shall at least record the company’s name, corporate object, closing date of the financial year, registered address, share capital, participations into which it is divided, their face value and numbering, and the company’s organisation policy.

A limited liability company shall have a minimum share capital of 500,000 pesetas and no maximum, which must be totally paid up since upon incorporation of the same. The bank at which the money is deposited shall certify payment, without imposing any restriction on the money: it may be used to purchase equipment, for example.


3.) Execution of the public deed of incorporation

The partners must sign the company deed before a Notary Public, attaching the negative certificate of the company name, by-laws and bank certificate.

4.) Steps to be taken at the Spanish Ministry of the Economy and Treasury

First of all, Transfer Tax and Stamp Duty must be settled, amounting to 1% of the share capital Payment must be made within 30 business days following execution of the deed.

Once this tax is settled, a Fiscal Identification Code (CIF) must be requested and a declaration of commencement of activity shall be presented. A previous declaration may be used if the activity is not started up immediately. The CIF obtained shall remain in force for a provisional term of 6 months. Once the original copy of the company’s incorporation deed is provided, as well as a photocopy of the entry recording the company at the Companies Registry, this provisional CIF shall become permanent.

Ten days prior to commencing the activity, the Tax on Economic Activities (IAE) must be paid.

5.) Steps to be taken at the Ministry of Labour and Social Affairs

Before commencing activity, the company must be registered within the Social Security system. If the company has employed workers on its behalf, it must register them before the start of the employment relationship. Furthermore, the term in which to notify the opening of the work centre shall consist of 30 days following commencement of activity. The corresponding books for licenses and inspections shall also be purchased and legalised.

6.) Steps to be taken at the Companies Registry

After settlement of the corresponding taxes, the company must be recorded at the Companies Registry corresponding to the registered address. To do this, the first original copy of the public deed and settlement of capital transfer tax must be presented, within a term of one month following execution of the public deed.

7.) Steps to be taken at the Town Hall

If works of any kind were necessary at the premises or establishment, a works license shall be necessary. In Madrid, works licenses are usually granted by Municipal District Councils.

The license for activities and installations (opening) shall also be necessary to certify that the installations envisaged comply with current urban planning law and other technical regulations which may be applicable. In Madrid, a single license may be requested covering these two permits.

Since restaurants involve a qualified activity (which may be noisy, unhealthy, noxious or dangerous), an operating license must be applied for once the opening license is granted.


8.) Other specific steps to be taken

Bars, coffee shops, restaurants and hotel establishments must also obtain an opening permit from the General Directorate for Tourism.

Should you require more information on the matter, please contact our offices.

Gerhard W. Volz
SCHILLER Abogados
Capitán Haya, 3-1º
28020 Madrid
Tel.: 91 417 97 80
Fax: 91 597 12 66
gwvolz@schillerabogados.es