It’s not “limited company = you’re no longer self-employed”

One of the most common misunderstandings when setting up a limited company is thinking that, because the company is the one invoicing, you stop being self-employed. That’s not the case if you work in your own company: the law requires you to register under RETA as a company-director self-employed worker when you have effective control of the company and carry out habitual, personal, direct work in it.

When the obligation kicks in

Broadly speaking, you’re considered to have effective control (and therefore an obligation to register as a company-director self-employed worker) in cases such as:

  • Being a partner and holding at least a third of the share capital.
  • Being a partner with at least a quarter of the capital and carrying out management/executive functions (as a director).
  • Being a director with paid executive functions, even if your stake is smaller, if in practice you control the company.
  • Adding your stake to that of family members up to the second degree who live with you can push the combined total over the control threshold even if you personally hold only a small share.

These specific percentages are worth checking case by case — the real-world detail (multiple partners, shareholder agreements, who actually manages the company) means a specific review is worth more than applying the general rule blindly.

What changes in your contributions

A company-director self-employed worker pays into the same scheme (RETA) as any other self-employed worker, but under different conditions from a “regular” self-employed worker:

  • Does have access to the flat-rate reduced contribution for people starting out (art. 38 ter.9 of Law 20/2007, LETA), same as a general self-employed worker, but cannot benefit from contribution bases below Group 7 of the General Scheme — unlike the wider margin a general self-employed worker has under the income-bracket contribution system.
  • A higher minimum contribution base than the general self-employed worker, regardless of what you actually earn that month — this is a quirk of the income-based contribution system in place since 2023.
  • Everything else (paying based on projected income, later adjustment) follows the same pattern as for a general self-employed worker — see the article in this series on RETA adjustments.

Why getting it right from the start matters

If you register under the wrong category (for example, as a general self-employed worker when you should actually be a company-director one, or the other way round), social security can demand the difference in contributions retroactively once it’s detected — which can be quite a while after the fact, with the added shock of an unexpected bill. This isn’t a minor administrative detail: it changes how much you pay every month from day one.

Before you set up the limited company, check this with someone

If you’re considering moving to a limited company, or already have one and aren’t sure whether you should be registered as a company-director self-employed worker, it’s one of the first things we check in a consultation: who manages the company, what stake each partner holds, and exactly what that means for your contributions. Write to us at contacto@asesoriamadal.es before an inspection decides it for you.