What are the legal aspects of setting a search fund in Spain?

April 16, 2021

by a searcher from INSEAD in Barcelona, Spain

Hi Searchers,

I am just getting ready to officially kick-off the search, and was wondering if you have any experience and advice regarding setting up the fund locally in Spain. On initial stages, would you recommend to remain as "autonomo" or to formally register the company as financial intermediary, for example, and even if it only has one administrator? If the latter, would you recommend a minimum amount of capital to be incorporated? Are there any other considerations I should keep in mind?

I have registered two companies/startups in the past, so fairly familiar with that process, just wondering what is the best approach in the case of a search fund.

Thanks a ton!

Reply by a searcher
from IESE Business School in Barcelona, Spain

Hi Noel, good luck in the search. I'm now raising a traditional search fund and have spoken to a number of players: searchers, lawyers, investors... I'll be happy to share my thoughts. Send over a note. The quick response to your question would be, forget about any legal structures if you are self funded until the actual acquisition. During the search process keep in close touch with a core group of investors.

Reply by a searcher
from IESE Business School in Valencia, España

If you are going to do it "self funded" you can remain as "Autonomo" (No investors, no partners, no shares that give rights, no salary, etc). Since you have investors, it is necessary to create a SL in which you will have the articles of association and the shareholders agreement which will rule the fund.

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