Capital increase in an SL: how to strengthen your company with legal certainty

Updated on 27 September 2026. The Spanish Companies Act has not changed as regards capital increases in 2025 or 2026. We set out the majorities, deadlines and requirements more precisely, correct who is liable for non-cash contributions and how far signing by video call goes, and add tax and common mistakes.

Increasing the share capital of a limited company (Sociedad Limitada, SL) is one of the most significant decisions shareholders can take during the life of a business. It strengthens the company's financial position and is also a way to bring in investors, reorganise the shareholding or correct an equity imbalance.

That said, this is not a simple accounting entry. It is an amendment to the articles of association (estatutos sociales) that requires a specific legal procedure, with formalities that, if skipped, can block registration or open the door to a legal challenge.

In this article we explain what a capital increase in an SL involves, when it is worth considering, what forms it can take, how it is formalised step by step and how it is taxed.

What does increasing the share capital of an SL mean?

Increasing capital means raising the capital figure stated in the articles of association. As it is an amendment to the articles, it requires a resolution of the general meeting (junta general), a public deed (escritura pública) before a notary and registration at the Companies Register (Registro Mercantil).

The core rules are in the Ley de Sociedades de Capital (Spanish Companies Act, LSC, Real Decreto Legislativo 1/2010), mainly articles 295 to 316, and in the Reglamento del Registro Mercantil (Companies Register Regulations, Real Decreto 1784/1996), articles 198 to 200.

Since Ley 18/2022 (Business Creation and Growth Act), an SL can have share capital of €1, but until it reaches €3,000 it must allocate at least 20% of its profit to the legal reserve and, if it is wound up with insufficient assets, the shareholders are jointly and severally liable for the shortfall up to that figure (art. 4 LSC). Increasing capital to €3,000 brings that regime to an end.

When does it make sense to increase capital?

• Raising finance without debt, to invest, enter new markets or develop projects without increasing bank borrowing.
• Strengthening solvency and the confidence of banks, suppliers and investors.
• Bringing in new shareholders who contribute experience, contacts or sector knowledge as well as money.
• Removing the loss-based ground for dissolution, which arises when net equity falls below half of the share capital (art. 363.1.e LSC). The directors have two months to call a general meeting and, if they fail to do so, they are liable for later debts (arts. 365 and 367). The COVID moratorium no longer applies.
• Capitalising reserves or profits, without the shareholders paying anything in.
• Reorganising the shareholding or converting shareholder loans into capital, while respecting the rights of minority shareholders.

Two ways to increase capital: new shares or a higher nominal value

• Creating new shares (participaciones sociales). They may be taken up by existing shareholders or by third parties. Shareholders have a pre-emption right (derecho de preferencia), but only where the increase is made through cash contributions (art. 304.1 LSC).
• Increasing the nominal value. Each shareholder keeps the same shares, but each one is worth more. This requires the consent of all shareholders, unless it is made entirely out of profits or reserves shown in the last approved balance sheet (art. 296.2).

Types of increase according to what is contributed

In an offsetting of claims, creditors (shareholders or third parties) convert what they are owed into shares and the debt is extinguished. In an increase out of reserves no new money comes in: funds that already belong to the company are moved into capital.

Any asset or right capable of economic valuation can be contributed (property, machinery, trade marks, receivables, shares or crypto-assets, which are treated as a non-cash contribution), but never work or services (art. 58). An SL does not need an independent expert's report, which is a requirement for public limited companies (sociedades anónimas, art. 67); in exchange, the law imposes a stricter liability regime.

Liability for non-cash contributions

Those who were shareholders when the increase was resolved and anyone who acquires shares paid up with non-cash contributions are jointly and severally liable, to the company and to its creditors, for the existence of what was contributed and for the value stated in the deed (art. 73 LSC). Shareholders who had their opposition to the resolution or to the valuation recorded in the minutes are exempt.

The directors are also liable for the difference between their valuation and the actual value. This liability becomes time-barred five years after the contribution (art. 75). Shareholders are released if the contribution is valued by an expert as for a public limited company (art. 76); although it is not compulsory, an independent valuation is the best protection.

Procedure for increasing the capital of an SL

1. Proposal and notice of the meeting

The full text of the amendment is drafted (art. 286). The notice must state what is being amended and the shareholders' right to examine that text and the reports (arts. 287, 300, 301 and 308), and must be given at least 15 days in advance (art. 176). If all the capital is present and everyone agrees, a junta universal (meeting held without prior notice with all shareholders present) is enough (art. 178).

2. General meeting resolution

• General rule: more than half of the votes of the entire share capital, not just of those attending (art. 199.a). The articles may require more, short of unanimity (art. 200).
• Removing or limiting the pre-emption right: only where the company's interest requires it, with two thirds of the capital (art. 199.b), a directors' report setting the real value of the shares, express mention in the notice of the meeting and a price (nominal value plus premium) in line with that value (art. 308).
• Increasing the nominal value with new contributions: the consent of every shareholder (art. 296.2).

3. Pre-emption right

In cash increases, each shareholder may take up shares in proportion to those already held, within a period of at least one month from the announcement in the BORME (Official Gazette of the Companies Register) or from the written notice sent to each shareholder (art. 305). Unless the articles of association provide otherwise, any shares not taken up are offered for a period of up to 15 days to those who exercised their right and, in the following 15 days, the directors may allot them to third parties (art. 307). If at the meeting itself all shareholders take up their share or expressly waive it, there is no need to wait; the deed must record this (art. 198 of the Companies Register Regulations).

4. Payment

The new shares must be fully paid up when the deed executing the increase is signed (art. 78), and the premium is paid in full when they are taken up (art. 298). If the increase is not fully covered, capital is increased by the amount paid up, unless the resolution provides otherwise (art. 310).

5. Public deed

It records what was contributed, who takes up each share, their numbering and their entry in the register of shareholders (libro registro de socios) (art. 314), together with the new wording of the article of the articles of association on capital (art. 313).

6. Form 600

Although the increase is exempt, the company must file Form 600 (modelo 600) within 30 working days of the deed. In the Community of Madrid, legal entities must file it online.

7. Registration at the Companies Register

The resolution and its execution are registered at the same time (art. 315), and the increase can be relied on against third parties acting in good faith from its publication in the BORME (art. 21 of the Commercial Code). If the deed has not been submitted for registration six months after the pre-emption period opened, those who took up shares may ask for their contributions to be returned (art. 316).

Can it be done by video call?

Yes, within limits. Since 9 November 2023, the Ley del Notariado (Notaries Act) has allowed corporate acts to be signed by video call provided that the contributions to capital are in cash (art. 17 ter, added by Ley 11/2023 of 8 May, in its part on the digitalisation of notarial and registry procedures). An increase involving non-cash contributions must be signed in person. The general meeting may be held online if the articles of association allow it (arts. 182 and 182 bis LSC).

How is a capital increase taxed?

• Transfer Tax and Stamp Duty (Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados). The increase falls within the 'corporate transactions' heading but is exempt (arts. 19 and 45.I.B.11 of the consolidated text), and no graduated stamp duty is charged on the deed (art. 31.2).
• Whoever contributes an asset. An individual declares in their personal income tax (IRPF) return the gain or loss, i.e. the difference between what the asset cost and the higher of two values: the nominal value plus premium of the shares received or the market value of the asset (art. 37.1.d of the IRPF Act). A company contributing an asset values it at market value (art. 17.4 of the Corporate Income Tax Act, LIS).
• Tax-neutral regime. That tax can be deferred (arts. 87 and 89 LIS) if the contributor ends up holding at least 5% of equity and there is a valid business reason; an individual can only apply it to assets other than shares if they are used in a business activity whose accounts are kept under the Commercial Code. The company must notify the Agencia Tributaria (Spanish Tax Agency) within three months of registration (art. 48 of the Corporate Income Tax Regulations), or face a fine of €10,000.
• VAT and municipal land value tax. If a business owner contributes business assets, this is a supply subject to VAT (art. 8.Dos.2.º of Ley 37/1992, the VAT Act), unless an autonomous business unit is contributed (art. 7.1.º). Contributing urban land may trigger the municipal land value tax (plusvalía municipal).
• State investor incentive. Personal income tax allows a 50% deduction (maximum base of €100,000 a year) when subscribing for shares in companies set up five years ago or less (seven for start-ups), with equity of up to €400,000 and a holding period of between three and twelve years, among other requirements (art. 68.1 of the IRPF Act).
• Madrid deduction. The Community of Madrid adds a 40% deduction, up to €9,279, for Madrid companies less than three years old that create jobs (art. 15 of its consolidated tax text); the same amount cannot be claimed under both the state and the Madrid deduction.
• Gifts in Madrid. Money given to a descendant, ascendant, spouse or sibling who uses it, within one year, to increase the capital of a company that meets the conditions of the Madrid deduction in art. 15 qualifies for a 100% reduction, up to €250,000, if the purpose is stated in the gift and it is made in a public document where it exceeds €10,000 (art. 22 bis). You will find more context in our guide to gifts and their taxation.

If a new investor comes in

• Beneficial owner. If someone comes to hold more than 25% of the capital or control, the beneficial owner changes (art. 4 of Ley 10/2010, the Anti-Money Laundering Act) and the company must update that information.
• Registro de Inversiones (Foreign Investment Register). If a non-resident reaches 10% of the capital, the investment is declared after it is made; if the investor gives the details to the notary, the notary forwards them (arts. 4 and 5 of Real Decreto 571/2023, the foreign investment regulations). If the money comes from a tax haven (a non-cooperative jurisdiction) and the foreign holding exceeds 50%, it must also be declared before it is made (art. 5.5).
• Prior authorisation. If the investor reaches 10% or control and is from outside the EU and EFTA, or is European but more than 25% controlled from outside, prior authorisation from the Government may be needed where the company operates in strategic sectors (critical infrastructure or technologies, energy, data, the media…). If the investor is controlled by the government of a non-EU country, it may be needed whatever the sector (art. 7 bis of Ley 19/2003, the act on capital movements and foreign economic transactions).

Common mistakes

1. Paying the money into an account that is not the company's, or signing with an expired bank certificate.
2. Calling the meeting without making the mandatory reports available: the registrar may refuse registration.
3. Excluding the pre-emption right without a two-thirds majority, without a report or below real value.
4. Overvaluing a non-cash contribution: liability lasts five years.
5. Using an offsetting of claims just to dilute a minority shareholder: if the resolution does not meet a reasonable need of the company and is adopted in the majority's own interest to the unjustified detriment of the others, it is abusive and can be challenged, generally within one year (arts. 204.1 and 205 LSC).
6. Not filing Form 600 because the transaction is exempt, or forgetting the notification of the special tax regime.

If you are a minority shareholder considering a challenge, bear in mind two further requirements. You must hold at least 1% of the capital, alone or together with other shareholders, unless the articles of association set a lower threshold; below that, you can only claim compensation for the damage caused, except against resolutions contrary to public policy (art. 206 LSC). And since 3 April 2025, before going to court you must, as a general rule, first try a medio adecuado de solución de controversias (MASC, an out-of-court dispute resolution step) such as negotiation, mediation or conciliation; the request suspends the time limit while the negotiation lasts (arts. 5 and 7 of Ley Orgánica 1/2025, on measures for the efficiency of the public justice service). It is debated whether this step is required to challenge company resolutions, so the prudent course is to take it.

Frequently asked questions

What is the share premium?

It is the amount paid above the nominal value of each share, so that whoever comes in pays the real value of the company without diluting the others. It is recorded as a reserve and must be paid in full when the shares are taken up (art. 298).

How much does it cost?

No capital duty is payable. Notary and Companies Register fees depend on their official scales and on the amount involved; on top of that come legal advice and, where applicable, the valuation of what is contributed or the audit of the balance sheet.

In summary

A capital increase reflects the shareholders' strategy and their commitment to the company's future. Well planned, it is a lever for growth; badly executed, a source of disputes, registration problems and unexpected tax costs.

If you are thinking about increasing capital, bringing in an investor or capitalising shareholder loans, we can review the structure, the paperwork and the tax position with you before the meeting is called. You can book a tax and business advisory consultation.

Important: this article is for information only and reflects the law in force on 27 September 2026. It is not a substitute for legal or tax advice tailored to your situation.

Legislation and sources

• Real Decreto Legislativo 1/2010, consolidated text of the Spanish Companies Act
• Real Decreto 1784/1996, Companies Register Regulations (arts. 198 to 200)
• Ley Orgánica 1/2025, on measures for the efficiency of the public justice service (arts. 5 and 7)
• Notaries Act (art. 17 ter, signing by video call)
• Real Decreto Legislativo 1/1993, consolidated text of the Transfer Tax and Stamp Duty Act (arts. 19, 31 and 45)
• Community of Madrid: corporate transactions and Form 600
• Ley 27/2014, Corporate Income Tax Act (arts. 17, 87 and 89)
• Ley 35/2006, Personal Income Tax Act (arts. 37 and 68)
• Ley 37/1992, VAT Act (arts. 7 and 8)
• Decreto Legislativo 1/2010 of the Community of Madrid, ceded taxes (arts. 15 and 22 bis)
• Ley 10/2010, Anti-Money Laundering Act (art. 4)
• Real Decreto 571/2023, foreign investment regulations (arts. 4 and 5)
• Ley 19/2003, on capital movements and foreign economic transactions (art. 7 bis)