One company per development: contributing land, splitting branches and bringing in a co-investor
Nextica Law & Tax carries out the corporate transactions that organise a property portfolio: setting up a special purpose vehicle for each development or each asset, so one problem does not contaminate the rest; capital increases with contributions in kind of land or property, with their valuation report and liability regime; demergers to separate the rental branch from the development branch; bringing in co-investors with a shareholders' agreement, reinforced majorities and agreed exits; and the articles' clauses governing share transfers.
When every development hangs off the same company, one dispute drags down the financing of all the others.
What's included
1. Designing the vehicle per development
a special purpose company with a defined object and a planned lifespan from the outset.
2. Contributing the land to the vehicle, in cash or in kind, with a valuation report where the corporate form requires one.
4. Decision rules over what is actually decided here
approving the design, signing the financing, setting the sale price and accepting an offer for the whole.
5. Restructuring operations where assets are separated from the activity
demerger, contribution of a business line and merger of already wound-down vehicles.
6. Annual accounts, filing and books for each vehicle, including those with no activity left but still in existence.
7. Orderly dissolution and liquidation on closing the development, with post-handover liabilities provided for before the company is struck off.
ONE COMPANY PER DEVELOPMENT, AND NONE CLOSED PROPERLY
The vehicle is set up quickly to start the works and abandoned slowly when the works end. The expensive part is the second stretch.
Contributing the land without the valuation report the corporate form requires
in a public limited company, contributions in kind require a report by an independent expert appointed by the commercial registry, and in a private limited company the valuation engages the joint liability of shareholders and directors.
Companies ActWinding up the vehicle with live liabilities for the delivered works
the statutory construction warranties keep running after handover, and if the company is struck off without provision, the claim goes against those who took part and against the shareholders up to the limit of what they received on liquidation.
Companies Act and Law 38/1999 on Building StandardsDormant vehicles still in existence
each keeps its accounting, annual accounts and filing obligations, and continued failure to file leads to closure of the company's registry page, which surfaces exactly when something needs signing.
Companies ActWHAT LEGAL FORM SUITS YOU? — COMPARATIVE ANALYSIS
| Limited Liability Company (LLC) | Public Limited Company (PLC) | Self-employed individual | |
|---|---|---|---|
| Legal framework | Royal Legislative Decree 1/2010 (LSC), arts. 86-310 | Royal Legislative Decree 1/2010 (LSC), arts. 1-85 and 162-310 | ET + LIRPF + Law 20/2007 TRADE |
| Minimum capital | €3,000 · no mandatory total immediate payment | 60,000 € · 25% minimum paid in the incorporation | No minimum capital |
| Responsibility | Limited to the contributed capital · personal assets protected | Limited to the contributed capital | Unlimited — responds with all of their personal and family assets |
| Taxation | IS 25% (15% new contributors first 2 years with positive BI) | IS 25% | IRPF marginal rate (up to 47% in Catalonia) |
| When to choose it | Most SMEs, startups, family businesses, and groups with multiple partners. Flexible and with lower incorporation costs. | When an IPO is anticipated, large capital increases with many investors will be made or the company will surpass a certain volume. | One-time activity, very low income, or starting activity with no significant risk. Not recommended if there is a risk of significant debts. |
Legal framework
Minimum capital
Responsibility
Taxation
When to choose it
Frequently asked questions
Is a separate company per development worth it?
Almost always, and not for tax reasons but for risk and financing. One company per asset ring-fences what can go wrong —a defects claim, a delay that triggers penalties, a licensing problem— and stops it contaminating the rest of the portfolio. Financing is also structured better: the bank secures over a closed perimeter and knows exactly what it is funding, and bringing a co-investor into one development does not mean opening up the whole group's share capital. The cost is administrative: more accounts, more formal filings and more accounting discipline.
Can I contribute a property to a company instead of selling it?
Yes, through a capital increase with a contribution in kind, and it is a common way to organise a portfolio or to bring in a partner contributing land while another contributes cash. What needs care is the valuation: for a limited company the law does not require an independent expert's report, but it does establish joint liability of the shareholders and directors for the existence and value of what is contributed, so overvaluing is not free. And the tax cost of the transaction should be analysed beforehand, since it depends on the regime that applies to it.
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