The Entrepreneurs Law creates the concept of the “Limited Liability Entrepreneur” (ERL). Limited Liability Entrepreneur status can be taken on by an individual entrepreneur, regardless of their business or professional activity, to limit their liability for the debt deriving from the conduct of their business which will prevent any such debt from affecting their principal residence under certain conditions. It makes an exception to the limited liability regime for any public law debts acquired by the Limited Liability Entrepreneur the collection of which is subject to the provisions of General Taxation Law 58/2003, of December 17, 2003, General Budget Law 47/2003, of November 26, 2003, and Legislative Royal Decree 1/1994, of June 20, 1994, approving the revised General Social Security Law.
1. Registration of ERL status at the Commercial Registry corresponding to the registered office:
The notarial certificate that must be submitted by the notary to the Commercial Registry on the same day or on the business day following its authorization, or the application signed with the digital signature of the entrepreneur and sent by telematic means to the Commercial Registry, will be sufficient to apply for first registration of a Limited Liability Entrepreneur.
2. Value of the principal residence:
(a) May not exceed €300,000 (valued according to the taxable amount for transfer and stamp tax purposes at the time of registration at the Commercial Registry).
(b) In the case of residences located in towns with more than 1,000,000 inhabitants, a multiplier of 1.5 will be applied to the value under (a) above.
3. Disclosure of ERL status
It must be mentioned on all documentation, stating the registry particulars.
4. Registration at the Property Registry
The fact that the principal residence is not tied to the professional activity must be registered at the Property Registry. The Commercial Registrar will issue a certificate and send it to the Property Registrar by telematic means on the same business day as registration of ERL status at the relevant Commercial Registry.
For further information, visit the extended version of our online Guide to Business:
Last updated: 16|09|2015