Ancillary services in LLCs

In today's article we will try to clarifying the role of ancillary services in LLCs or Limited Liability Companies: what are these obligations, what are they for, what rules regulate them... It is a less known topic than usual, but very interesting if you have an LLC or you are about to create one so, go ahead and read on...

What are ancillary services?

As we usually do in this type of article, we will start by looking at the definition of the central issue, in this case the definition of ancillary benefits.

Ancillary services are non-monetary contributions voluntarily assigned by the partners of a limited or public limited company. In this definition it is interesting to underline the words “...".“non-monetary”because this is precisely the crux of the matter: the partners cannot contribute capital (extra money) to the company; what they contribute is either their time or a range of personal or professional products or services that add value to the company, improve its operation, increase its competitive capacity, etc.

Some important facts to remember about ancillary services:

• Ancillary services do not form part of the company's share capital, but they do form part of the company's share capital. social heritage as they are part of the company's vital asset: its “Know-How”or, in Spanish, its “know-how”.
• Each and every ancillary benefit must be agreed and consensual by the shareholders and are either described in the company's articles of association or in the company's statutes.
• Ancillary services may have free of charge or for remuneration. In both cases this circumstance must be clearly defined in the deeds or in the statute of creation of the company by adding any type of clauses o additional information about the conditions to be fulfilled: what kind of ancillary benefits are allowed, which partners will contribute, when and how, etc.

Types of ancillary services

There is three main groups of ancillary services that can contribute greatly to the social and economic success of an LLC or Limited Liability Company:

1. Ancillary benefits in the form of working time. The partner who contributes his time and personal dedication to the fulfilment of productive, commercial, distribution, etc. tasks.
2. Ancillary services in the form of services rendered. The partner who provides, for example, catering services, corporate design, company computer repairs, writing articles for the company blog, etc.
3. Ancillary benefits in the form of assigned products. The partner who provides products for the company's use. This would be the case, for example, of a partner who owns his own small mobile phone company and provides free of charge the terminals that the other partners need for their work.  

What is the purpose of ancillary services?

As noted in the previous section, ancillary benefits do not increase the share capital of the company and Nor do they serve to improving its liquidity, cover debts, etc. Then... What are they for?

Ancillary services do not directly increase the capital, but they do they do so indirectly as they serve to improve the know-how of the company, its public image, etc., and all of this can be translated into a greater and better economic performance of the company.

In addition, although these benefits do not add up to capital (money), they do serve to save the cost of the products or services provided by the partners, which would have to be contracted and paid for by professionals or companies outside the company.

Which rule regulates ancillary services in LLCs?

The ancillary services in Limited Liability Companies or LLCs are regulated in the Capital Companies Act, specifically in the Article 86 from Royal Legislative Decree 1/2010, of 2 July.