The Start-Up ecosystem has emerged in recent years as one of the most innovative sectors in the business landscape. Incubators, accelerators, entrepreneurs, and "Minimum Viable Product" are concepts that seemed outdated but have reinvented themselves to fit into the world of Start-Ups.
The definition of the renowned Anglo-Saxon term translates into Spanish as "start-up"; indeed, Start-Ups are essentially ideas that materialize - or at least attempt to - into economically viable projects with exponential growth from their inception.
The fundamental question that an entrepreneur must ask in the context of this evolution is: Once the idea is defined and one intends to make it effective, what is the most appropriate legal instrument to house my project?
There are many possibilities, and most of the time, the choice is made for the incorporation of a commercial company because it is a suitable vehicle to operate in economic traffic with the start-up idea.
However, capital companies come with the dreaded drawback for every budding entrepreneur: costs. In addition to inherent incorporation expenses, accounting logistics and the obligation to prepare and submit annual accounts add expenses that do not always fit into the business plan of the venture.
Faced with this economic hurdle, there is a form of association regulated since 1889: communities of goods, which according to Article 392 of the Civil Code exist when the ownership of a thing or a right belongs pro indiviso to several persons.
The Community of Goods is the pooling of assets (pardon the redundancy) by partners or co-owners. Legally, it is constituted by the signing of a private agreement among the partners and has fiscal recognition and the ability to allocate a Tax Identification Number (NIF).
It lacks legal personality, which may make it seem like a less protective tool than a capital company. Nevertheless, it is proposed as a legally suitable mechanism to host a Start-Up project, ensuring legal certainty - a security that can be further reinforced with the signing of a Shareholders' Agreement among the co-owners.
It is here, where tradition blends with innovation, that a software application can be developed under the auspices of a legal instrument regulated in a 19th-century norm.
Entrepreneurs often use this instrument in the initial development and commercialization phase of the product or service that the Start-Up aims to provide, assuming direct and personal responsibility for the economic activity.
Ultimately, it is necessary to consider all existing options when embarking on a venture, not to use typical legal instruments simply because they are the most well-known, and to avoid falling into the trap famously popularized by Antonio Machado: "only the fool confuses value with price."
With this writing, we aim to draw attention to the necessary groundwork required to focus on what truly matters in an economic project: the viability of the idea and the potential for success in the market, which must be realized through the most appropriate legal vehicle for each project.
Borja García Rato
Calle Velázquez 92, 5º Derecha, 28006, Madrid
Tel: +34 91 737 25 78
