How an SL remunerates its partners

• Limited companies (SL) are a popular structure that allows the participation of different types of partners
• Each of them has specific roles and responsibilities within an entity.

Limited partnerships (SL), also known as limited liability companies (LLC), are a popular structure that allows the participation of different types of partners, each of whom has specific roles and responsibilities within an entity.

These members limit their liability to the capital they have contributed, in such a way that they avoid responding with their personal funds for any possible debt of their company or business.

In the business environment, the remuneration of these partners is a crucial aspect for the efficient management of the company; Its formal and fiscal treatment must be considered by its management team.

In accordance with article 104 of the Royal Legislative Decree 1/2010, of July 2, which approves the consolidated text of the Capital Companies Law, the limited company will keep a record book of partners in which the original ownership and successive transfers - voluntary or forced - of the social shares will be recorded, as well as the constitution of real rights and other encumbrances on them.

Partner Types

In this regard, the two types of partners that can exist in an SL and the respective remunerations are differentiated:

• Working partners: those who are actively involved in both the management and daily operation of the entity. They can be remunerated through salary or through profit sharing.
• Capital partners: contribute capital, but do not participate in the daily tasks of the company. Their profits are obtained from dividends and other shares of the company's profits. startup.

How an SL remunerates its partners

Depending on the types of partners, differences in the respective remunerations are also contemplated:

• The remunerations of working partners are established through formal agreements. Examples of this are employment contracts or profit sharing agreements. These documents detail responsibilities, salary conditions, and profit-sharing criteria. They must always be transparent for all parties involved and be in up-to-date compliance with current labor laws and the company's bylaws.
• On the other hand, the remuneration of the capitalist partners comes in the form of a dividend. This is that part of the profits that a company has generated and that are distributed among the partners or shareholders based on the participation of each member in the company's share capital. Such payments are usually approved at shareholders' meetings and are also governed by the regulations in force in the company's statutes.

Tax treatment

In the tax field, the implications of the remuneration of partners are highly important. They require careful management in formal and fiscal aspects that complies with tax obligations and avoids possible sanctions.

Salaries paid to working partners are deductible expenses for the company since the regulations allow them to be deducted to adjust the payment of taxes in the income tax return and can reduce their tax burden on the payroll.

In the case of dividends, the tax treatment varies by jurisdiction. And depending on it, they are taxed at a different rate compared to other income.