Sociedad Limitada vs autónomo: which business structure should you choose in Spain?

Many founders start out as autónomos (self-employed). It's quick to register, low in admin and gets you earning quickly. But at some point (usually when revenue starts to grow) the question comes up: does it still make sense to stay as an autónomo, or is it time to incorporate a Sociedad Limitada (SL)?

This guide talks about some of the key differences between these two setups and gives you an idea of how to decide which might be right for your situation.

When you know which one is right for you, you can register as an autónomo or incorporate your business when applying for your Monzo Business Account. That means you can speed up your incorporation and open your bank account in one go.

Key differences between autónomo and Sociedad Limitada

Before diving into the detail, it helps to have an overview. The difference between an autónomo and a Sociedad Limitada goes beyond paperwork: it affects how your business is taxed, who's liable for debts, and how clients and financial institutions see you.

Liability: what happens if things go wrong?

This is often the most important difference, and the one that gets overlooked.

As an autónomo, your liability is unlimited. If there is a legal issue with a client, a supplier isn't paid or a project goes over budget, creditors can come after your personal assets like your savings or your car.

With an SL, your liability is limited to what you've put into the company. If the business runs into trouble, your personal finances can be more protected.

There are exceptions:

• If the company has less than €3,000 in share capital and closes without enough assets to pay its debts, the shareholders can be responsible for the gap between its subscribed capital and €3,000.

• Directors can be held personally liable in cases of negligence, for example, if they continue trading while insolvent, fail to file annual accounts or act against the interests of the company.

• A lender may ask you to personally guarantee a company loan. If you agree, you could have to repay the guaranteed debt yourself if the company can’t.

So an SL gives your personal assets meaningful protection, but it isn’t an absolute guarantee.

Tax: when is an SL more efficient?

The legal structure you choose has a direct impact on how much tax you pay, though the comparison between IRPF and corporation tax depends heavily on individual circumstances.

Autónomos and IRPF:

As an autónomo, you pay IRPF as an individual, just like anyone else. Your business profits form part of your personal taxable income, alongside any other income you receive. IRPF is progressive, so the percentage you pay generally rises as your total income increases.**

SL and corporation tax:

SLs pay Impuesto sobre Sociedades (IS). The general rate is 25%, but is lower for small businesses. For newly created companies, the reduced rate is 15% during the first two tax periods in which positive taxable income is obtained*. That can be a meaningful advantage in the early profitable years.

But the company’s tax bill isn’t the whole picture. You may also pay personal tax on money you take out of the business. A salary or directors’ remuneration is generally treated as employment income, while dividends are taxed as investment income. To compare an SL with being an autónomo properly, you need to look at the combined company and personal tax costs.

At what level of turnover does an SL make sense?

There's no single threshold, because it depends on several variables: how much you pay yourself as a director, whether you have shareholders, your deductible expenses, and the autonomous community where you're based. That said, as a rough starting point for a conversation with your gestor, many professionals start considering the switch when annual profits consistently exceed €40,000-60,000.

The most important thing: don't make a tax decision without speaking to an authorised gestor or adviser. Tax rules can change, and every situation is different.

Costs and admin burden

Before choosing, it's worth being clear about what each option actually costs, both upfront and on an ongoing basis.

Autónomo:

Registration with Social Security: free, though you start paying RETA contributions from day one. The minimum contribution starts at approximately €200 a month***, though it varies depending on the contribution base you choose. See our guide on getting setup as an autonomo here.

This can keep your accounting simplified as you keep income and expense records, with no audits or accounts filing required.

Sociedad Limitada:

Setup costs: roughly €566-1,616, covering notary fees and registration. Using the CIRCE system can speed up the process****.

You’ll need to do contabilidad mercantil (mercantile accounting) - this is a mandatory requirement. So in practice, you'll need a gestor or accountant and annual accounts will need to be filed with Registro Mercantil. Any paid directors who are societario autónomos will need to register and contribute to RETA.

In short, an SL means more cost and more admin. But when your business volume justifies that investment, the tax efficiency and asset protection can more than make up for it.

Credibility: the factor many founders overlook

An SL looks more formal to clients, particularly corporate clients and public sector organisations. Some B2B contracts and public tenders are only open to legal entities (companies), not to individual autónomos.

If your business involves larger clients, contracts over €10,000 or work with government bodies, having an SL can open doors that an autónomo registration won't.

One practical step: having a business account in your company's name (not your personal account) signals professionalism from the very first invoice.

With Monzo Business, you can set up a business account in your company name entirely from your phone, with a Spanish IBAN and a clear record of company income and expenses. You can even register as an autónomo or SL at the same time, so you can tick off business setup and business bank account in one go with Monzo.

Checklist: when does it make sense to set up an SL?

There's no single right answer, but here are the clearest signals:

• Your annual profits are consistently exceeding €40,000-60,000 (this is indicative; check with your gestor)

• You're bringing in shareholders or investors

• Your business activity carries significant risk to your personal assets

• You want to work with larger clients or bid for public contracts

• You need a clear separation between your business and personal finances

• You're planning to hire staff on a stable basis

• You want to present a more substantial image to the market

These aren't hard requirements, just signals that it might be worth running the numbers with an adviser.

How to transition from autónomo to SL: first steps

You can make the switch from being an autónomo to SL. The process itself is quite manageable. However it is worth factoring in that there is some admin you and your customers will need to complete to make this happen. For example, you’ll need to transition any existing contracts with suppliers or customers over to your new SL setup. If you decide the time is right, these are the high level steps you’ll need to go through:

1. Decide the structure: How many shareholders will there be? Who will be the director?

2. Set up the company: With a notarial deed and registration at the Mercantile Registry. You can use the CIRCE system⁴ to speed things up.

3. Register the business activity: By submitting a census declaration to AEAT.

4. Open a business account: An SL needs a company account with its own tax ID from the very start.

5. Deregister as autónomo: If you're no longer operating in your own name, you'll need to deregister from Social Security and from the economic activity register.

6. Transfer contracts: Review existing contracts and formally assign them to the new company where needed.

Financial management in an SL: open a business account from day one

An SL must have a bank account under its company NIF (the tax ID used by Hacienda), and keeping company and personal finances separate isn't optional, it's a legal requirement.

When choosing a business account for your SL, some useful features to look out for include:

• Spanish IBAN

• Expense tracking and categorisation

• Gestor integration or read-only access for your tax adviser

• Digital onboarding, no branch visit required

Monzo Business offers digital business account opening for SLs, with a Spanish IBAN, Pots for reserving VAT and other funds, and clear expense tracking, all from your phone. As always, compare your options to find the best fit for your business.

Conclusion: autónomo or SL?

Neither structure is universally better. The autónomo setup is simpler, cheaper and perfectly adequate for many self-employed people throughout their career. The SL offers liability protection, potential tax efficiency at higher income levels and greater credibility with corporate clients.

The decision comes down to your income level, risk profile, client base and long-term plans. A good gestor can run the numbers for your specific situation and help you decide.

When you're ready to take the next step, open your Monzo Business account to start managing your company's finances from day one.

Sources

*Agencia Tributaria: Corporation Tax (Impuesto de Sociedades), general and reduced rates: agencia.tributaria.gob.es

**Agencia Tributaria: IRPF income tax rates for self-employed individuals: agencia.tributaria.gob.es

***Seguridad Social: RETA registration, contribution brackets and flat-rate reduction (2026): seg-social.gob.es

****Ministry of Industry and Tourism: CIRCE portal for company creation: portal.circe.es

This article is for informational purposes only and does not constitute tax, accounting, or legal advice. Legislation may change. Always consult a qualified gestor or adviser and verify current information.