In an SL the capital must be fully paid in when the deed of incorporation is signed, and since Law 18/2022 the minimum is 1 euro; in exchange, until the legal reserve plus the capital reach 3,000 euros, at least 20% of each year's profit must go into that reserve. More on the company form under sociedad limitada.
In practice, cash capital is paid into an account in the company's name before going to the notary, who asks for the bank certificate of the deposit; if assets are contributed instead, they have to be described and valued in the deed. Once the SL exists, that money belongs to the company and can be used to pay business expenses: it does not have to sit untouched in the bank.
Typical mistake: confusing capital with cash. A company with little capital can still have plenty of money in the bank, and the other way round. Another mistake is thinking that incorporating with the minimum has no consequences: until the threshold set by law is reached, part of the profit is locked into the legal reserve and cannot be distributed.
Capital appears in the equity section of the balance sheet, within the annual accounts, and any increase or reduction is registered at the Registro Mercantil. In kontora you see it on the balance sheet of your double-entry books.
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