Self-employed: What is it, what are its obligations, how do you get paid?

If you are thinking of starting up a business through a company, it is essential to know what it means to be self-employed.

In this article we explain what it is, what types exist, when it is compulsory to register, how it is taxed and what the main differences are with respect to the traditional self-employed. We also answer the most frequently asked questions about this figure, which is becoming increasingly common among entrepreneurs and small business owners.

What is a corporate self-employed person?

The corporate self-employed is a self-employed person who has set up a company, usually a limited company. Unlike the traditional self-employed, this figure is not liable for the debts of the business with his or her personal assets, but limits his or her liability to the company's share capital.

This structure offers greater legal and financial protection, making it a much more attractive option for those seeking to start up with partners.

Types of corporate self-employed

Corporate self-employed can be classified according to their participation and role in the company:

1. Working partnerOwns at least 33% of the share capital and actively participates in the management of the business.
2. Cohabiting partnerNo shareholding, but cohabiting with a partner who holds at least 50% of the company.
3. Partner with management and/or administrative functionsHolds 25% of shares and exercises leadership or management functions.
4. Capitalist partnerYou are not obliged to work in the company or to register with the RETA, you simply contribute to the share capital. You will be able to enjoy the profits through the distribution of dividends.

When do you have the obligation to be self-employed as a company?

The obligation to register as a self-employed company arises when:

• It exercises leadership and business management functions.
• You are a director of the company.
• Relevant shareholdings are held and remunerated services are provided.

Not necessary if the partner does not actively work in the company and is not paid for it.

Differences between a self-employed person and a corporate self-employed person

1. ResponsibilityThe common self-employed person is liable with his or her personal assets, whereas the corporate person limits this liability to the capital of the company.
2. QuotationThe minimum contribution base for the self-employed is higher, as are their monthly contributions.
3. Legal StructureThe process of forming a company is more complex and costly than registering as a self-employed individual.

How to register as a self-employed company

To register:

1. Incorporate the company by going through the notary's office and the Commercial Register.
2. Apply for the provisional and definitive NIF.
3. File form 036 at the Tax Agency.
4. Complete and send form TA.0521 to the Social Security.
5. If you are hiring staff, ask for the Contribution Account Code.

How should a corporate self-employed person be paid?

Charging can be done by means of:

• InvoiceIf the activity is professional, the self-employed person is obliged to invoice the company.
• PayrollIf the activity is a business activity, the self-employed may choose to have a payroll within the company.
• DividendsPartners may also be paid through dividends. However, this is only recommended for salaries above €240,000.

Is it possible to collect payroll and invoice?

Yes, depending on the type of work performed within the company. If you are paid for administrative, managerial or managerial work, it will normally be through payroll, whereas if you provide services, it should be through an invoice.

Frequently asked questions

1. Does the corporate self-employed have access to the flat rate?
Yes, as a corporate self-employed person you can access the flat rate under the same conditions as other self-employed persons.

2. Do self-employed companies have access to unemployment benefits?
You have the same rights as ordinary self-employed people. It is difficult but not impossible.3. Does the corporate self-employed person receive a salary or an invoice?
It will depend on whether the activity carried out is professional or business. If it is a business, payroll. If it is professional, invoice.