What is a labour company?
This type of company is basically characterised by the fact that most of the company’s capital is in the hands of the company’s employees, people who provide services and who are paid. The purposes of the workforce owned company are commercial activities. Once this company has been incorporated it is subject to all the regulations issued by the Law governing SOCIEDADES LABORALES depending on the place where it is set up.
A workforce owned company can either be regulated on the basis of the characteristics of limited liability companies for employees or from public limited companies as a workforce owned company. None of the shareholders will own shares or even holdings in the company which represent more than one third of the company capital.
Characteristics of a workforce owned company
It is important to bear in mind that the share capital of a company must be distributed either in registered shares or in company shares, which can also be owned by the partners. On the other hand, there are conditions which regulate the activity of the workers. One of them has to do with the number of working hours, given that the hours worked cannot exceed 15% of the hours worked during the year by those who are shareholders.
In addition to the above, this type of company tends to operate under a special regime with regard to the transfer of worker owned holdings. In order to do this, preference will be given to long term workers on indefinite period contracts who are not in the position of being shareholders. In the event that they do not exercise the right, it will be transferred to the worker owned companies, then to the general category of shareholders and finally to the other workers who do not have a long term indefinite period contract.
Liability of a company with a workforce owned company: this has limited liability in respect of third parties, which is subject to the contributions made to the consolidation of the company capital.
Company capital: the majority of the company capital will be held by the workers, this will be at least 51%. In order for it to be operational, the total of the share capital must be duly paid up. The particular amount may vary according to the country.
Shareholders: in order to consolidate a workforce owned company, at least three shareholders must be present at the time of incorporation. In some countries only two partners are required.
Requirements: the company must have preferential acquisition rights, which guarantee that capital increases are proportional to the number of shares. It must be registered with the Mercantile Registry in order to have the legal personality required to start operating. You must also apply for a certificate of employment qualification issued by the Ministry of Employment, as well as that of Social Security.
Steps for creating a workforce owned company
A workforce owned company may be incorporated from two points upwards, either as a working shareholder or as a non-working shareholder. If you are a working shareholder, you are assumed to be a person who provides services to the company and therefore has an employment relationship and becomes the owner of shares. This, while the non-working partner may be a natural or legal person who is part of the “general class”:
Registration: the workforce owned company must be certified by the Central Companies Register, which can be used to accredit it as a legally incorporated workforce owned company (SL). This has to be valid for two months. This part also includes the Commercial Register, which requires the Administrative Register. These documents must include the qualification obtained.
Bank account: the opening of a bank account operating in the company’s name is required. There, a bank certificate will be issued stating the share capital contributed. As for the amount, it must be at least 25% to start, however, the certificate will be obtained with 100% of the share capital.
Public deed: this document is extremely important, so working or non-working partners must have it once the Articles of Association are notarized.
Advantages of a workforce owned company
One of the most important advantages of the workforce owned company is related to the tax incentives and benefits available to it, as is the case with corporation tax, which it is much closer to obtaining than other types of companies. Furthermore, 10% of profits must be within the company and are subject to corporation tax as is the case with other tax incentives.
It is the employees of the company who have the majority of the management, This gives them an advantage at the fiscal level and in their legal form, since conflicts and their management are no longer in the hands of the shareholders, which in many cases tends to complicate the processes around determining situations of the company.
This is a model of society with many virtues in relation to security, transparency and motivation for their employees or workers.
If you are thinking of incorporating this type of company, consult an expert to guide you very well in the process.