Setting up a company becomes advisable when there is a need for several people to join forces and resources (usually money, goods or intellectual property) in order to make money. The resulting organisation has a legal entity which is separate from those of its shareholders, a circumstance which means the partners are not personally liable for any debts the company may come to have, whether it be a joint stock or private limited company. In this way the partners limit their responsibility to the value of the shares they hold in the company.

In Spanish law, the legislation governing the conduct of joint stock companies has undergone several changes with the aim of achieving harmonisation with Europe. Among the major changes made, the requirement to raise a minimum share capital of 60,101 euros stands out as the most important, as it obliged many joint stock companies to convert into private limited ones.

The technical definition of a joint stock company could be defined, more or less, as a for profit trading company, with an equity of at least 60,101 euros divided into shares, operating under a principle of limited partner responsibility for company debts.
 
Barring the amount of the obligatory minimum share capital, the procedure for setting up a joint stock company are similar to those for a private limited company. Among the most important requirements are:

� To register a company name which the partners are free to use. This name will serve to identify the company and must be registered in the Company Register (Registro Mercantil). Prior to registering the partners must certify that there is no other company with the same name. This certification is issued by the Central Company Register and the applicant must be one of the partners. Usually the company will delegate this work to an agency (gestor�a). No other part of setting up a company is as slow as this company name search, since it usually takes between 10 and 15 days.

� On the application form for the company name, the Registry clerks will advise applicants to list at least three names, since there are millions of names in existence and it is possible that the chosen company name has already been registered.

� The notary responsible for drafting the company�s deeds of incorporation will ask the partners for the original of the certificate of the negative vetting of the company name (i.e. the document in which it specifies that there is currently no other company registered in Spain with the same name). There are no short cuts to this process and no notary public will admit photocopies.

� Once the partners have a name for the company, officially accepted by the Central Company Registry, the next step is to go to a notary. The founders -each of them with a certificate proving that they have deposited their part of the capital and each with their original DNI (National Identity Document)- appear before the notary, where the deeds of corporation will be signed by the partners in the presence of the notary.

� Then, with a provisional copy of the deeds of incorporation of the company, any of the partners can apply for a Fiscal Identification Number (NIF) from the Tax Office corresponding to the company�s official address. Almost immediately they will grant the NIF, although only provisionally. The NIF becomes definitive when the company is finally registered in the Company Register.

Prior to this the partners have to pay the tax on Corporate Transactions (Operaciones Societarias) at the local Tax Office. This tax levies 1% on the company's share capital. 

Once the company is registered in the Company Register the incorporation of the company will be announced in the Official Bulletin of the Company Register.

What information is included in the deeds of incorporation of a company?
� Full name and age of the founders, if the partners are natural persons.
� If the founders are legal entities then certification of the companies name and addresses will be required.
� The nationality and address of the partners, whether they are natural or legal persons.
� The express desire of the partners to form a joint stock company.
� The approximate amount of the costs of incorporation (not necessary in the case of private limited companies).
� The statutes by which the company is to be governed. Normally it is the notary who provides a model of the statutes, according to the needs of each case.
� The name of the persons who will be responsible for the administration and representation of the company. The personal details of the administrators and the auditors of the company accounts.