Creating a company in Andorra: preparing the notarial deed and successfully incorporating your company

Setting up an Andorran company involves several steps, including choosing a name, depositing capital and signing various documents before a notary. Preparing the notarial deed plays an important role in this process. An incomplete file, an inconsistency in the articles of association or a missing supporting document can delay the incorporation process and require the shareholders to repeat certain steps. This guide will help you understand, in order, what needs to be prepared before signing and which points require particular attention.

As formalities may change and certain situations may require specific procedures, the requirements applicable to a particular project should be confirmed with the Andorran authorities and the professionals assisting with the incorporation. This may be particularly relevant for non-resident shareholders or businesses operating in regulated sectors.

How does the process of setting up a company in Andorra work?

Before preparing the legal documents, you first need to define the project precisely. What activity will the company carry out? Who will the shareholders be? How will the capital be divided? Who will manage the company? Where will its registered office be located? These decisions are not merely formalities. They determine part of the content of the articles of association and influence how the company will operate after its incorporation.

In Andorra, the most common company structures include the limited liability company, or SL, and the public limited company, or SA. Other structures are also available and may be appropriate in specific circumstances.

Once the legal structure has been chosen, the shareholders must prepare the articles of association and gather the documents required for incorporation. The application then goes through various administrative, banking and notarial stages before the company can become fully operational.

When a project involves foreign shareholders, legal entities, a regulated activity or a particular capital structure, the process may require additional preparation. You should therefore base your approach on the founders' actual circumstances rather than assuming that a standard procedure will systematically apply to every company formation.

SL or SA: choosing a structure suited to the project

The choice of legal structure should reflect the company's economic reality.

The SL is generally suited to projects with relatively simple shareholding and governance structures. The shareholders' liability is, in principle, limited to their contributions, subject in particular to any personal liability that may arise from management misconduct, personal guarantees or other situations provided for by law.

The SA is more suited to projects requiring a more substantial capital and governance structure. However, the choice between an SL and an SA should not be based solely on the expected size of the business. The amount of capital, number of shareholders, decision-making procedures, potential arrival of new investors, rules governing the transfer of shares and the medium-term strategy should also be taken into account.

The articles of association translate these choices into legal terms. They specify the company's name, corporate purpose, capital, shareholders' rights and organisational structure. This is why a generic template for articles of association quickly reaches its limits. Two companies operating in the same sector may require very different rules if one is owned by a sole shareholder while the other has several founders with different interests.

For example, an e-commerce project run by two shareholders may seek a relatively simple organisation while precisely defining the conditions for transferring shares. A project involving several investors may require more elaborate governance and decision-making mechanisms. The final choice should be validated based on the project's specific legal, tax and economic circumstances.

Preparing the notarial deed without waiting until the last minute

The signing before the notary is the culmination of work that begins well before the appointment. The shareholders must be able to prove their identity and provide the documents required for incorporation. The articles of association must be consistent with the proposed project, and the information contained in the various documents in the file must match.

The bank and the professionals handling the application may also request documents that help establish the source of the funds and the nature of the proposed activity. For documents issued abroad, additional formalities may be required depending on their nature and country of issuance, particularly regarding legalisation, apostille or translation.

In practice, difficulties often arise from details: an identity recorded differently from one document to another, an expired document, an amount that does not match the articles of association, or a foreign document that is not presented in the expected format.

The best way to avoid these delays is to have the file reviewed before definitively scheduling the signing. This precaution is particularly useful when several shareholders live in different countries, as obtaining a new original document or completing a formality involving a foreign document can significantly extend the timeline.

From defining the project to signing the deed

The incorporation process follows a gradual sequence. The founders first define the business activity, registered office, capital, its allocation and the governance rules. These decisions make it possible to prepare the articles of association and determine precisely which documents will be required.

The next step is to prepare the contributions. When the capital is contributed in cash, the necessary banking formalities must be completed according to the procedures applicable to the application. When assets are contributed to the company, their nature, ownership and valuation must be examined particularly carefully.

The file can then be submitted to the notary for review and preparation of the deed. If an inconsistency is identified at this stage, it may need to be corrected before signing. After incorporation, further formalities must still be completed with the relevant authorities before the company can operate normally. The signing before the notary should therefore be viewed as an essential stage in the process, rather than as its final administrative step.

What exactly is the role of the notary?

The notary provides the legal authenticity required for the incorporation deed and checks the elements falling within their remit. However, the notary's role should not be confused with that of a lawyer, tax adviser, accountant or bank. Depending on the circumstances, several professionals may be involved, each with different responsibilities.

The notary verifies the elements required to draw up the deed and ensures that it complies with the applicable legal requirements. Preparation beforehand therefore remains essential. The notarial appointment is not intended to replace the shareholders' consideration of their governance or strategy.

Consider the case of two founders planning to develop an e-commerce business together. Beyond the formal creation of their SL, an important question is what will happen if one of them wants to sell their shares, if the two shareholders disagree, or if a new investor needs to join the company.

These situations are much easier to anticipate at the time of incorporation than once a dispute has arisen. This is precisely why the quality of the articles of association matters just as much as their formal compliance.

Cash contributions and contributions in kind: an important distinction

Not all contributions to a company's capital necessarily take the form of a cash payment. A cash contribution is an amount paid into the company. A contribution in kind involves an asset to which a value can be assigned. This could include certain equipment, vehicles, assets or rights, provided that they can legally be contributed in this way.

This distinction is important because a contribution in kind immediately raises several questions: Who actually owns the asset? Can it be transferred to the company? What value should be assigned to it? Are there any rights or charges affecting it?

For example, suppose a shareholder wishes to contribute a vehicle valued at €30,000. It is not enough simply to enter this amount in the articles of association. The valuation must be properly supported in accordance with the applicable rules, since the value adopted contributes to representing the company's capital.

An approximate valuation can create difficulties between shareholders and affect the reliability of the information provided to third parties. For a significant or complex contribution, it is advisable to address the issue sufficiently early and verify the valuation requirements applicable to the specific case.

How long should you expect to set up your company?

It can be tempting to look for a standard timeframe, but this rarely provides an accurate picture of an actual application. The incorporation timeline depends on the shareholders' circumstances, their place of residence, the nature of the business activity, the availability of documents, bank checks, any required authorisations and the complexity of the contributions.

A straightforward and properly prepared application can naturally move faster than a project involving several foreign investors or requiring supporting documents from different jurisdictions. Rather than building your schedule around a theoretical timeframe, it is safer to allow some extra time before an important business deadline, such as signing a contract, hiring an employee, finalising a commercial lease or launching an activity.

It is also important to bear in mind that signing the deed does not necessarily mean that all formalities have been completed. Registration, tax and administrative requirements, as well as sector-specific requirements depending on the activity, must also be taken into account.