JUNIOR COMPANY

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It is a good option for setting up your business if you are studying or enrolled in a university. These centres must provide them with the basic infrastructure: a room, a computer, access to the library and advice and guidance from one or more teachers from the school.

What is a junior enterprise?

A junior enterprise is a non-profit university company, formed by university students with the aim of develop business projects and improve their entrepreneurial and professional skills. Junior enterprises are located in many countries in Europe and Latin America and are affiliated to national or international organisations. The students work together as a real company, taking on roles and responsibilities similar to those of a real company. This allows them to gain experience in project management, decision making and problem solving, as well as in the application of knowledge acquired at university.

Legal aspects of the Junior Enterprise

Junior enterprises can undertake a variety of projects, from small business consultancy to the creation of innovative products or services. The The main objective is to learn and improve, and the income generated by the activities of the junior enterprise is often reinvested in new projects or in the training of students. From a legal point of view, are covered by a law on non-profit associations and associations for economic purposeswhich allows Junior Enterprises to have their own legal regulations and allows companies to make special employment contracts with them.

The income that a Junior Enterprise obtains must be allocated to the lifelong learning of its members, within the social fund of the Junior Enterprise. Another part of the income for services rendered may revert to the members of the project in question, as compensatory grants. They are also required to pay tax on the Corporate income tax in those activities that do not constitute its corporate purpose, and to withhold and pay the IRPF whether its members receive any remuneration.

As a company not-for-profitThe income obtained from this activity is reinvested in the association itself. In addition, they are considered to contribute value to society and are therefore rewarded by the legal system with a series of tax benefitsJunior companies are exempt from VAT and are only liable to pay corporate income tax if the activity that gave rise to the income is not of a social nature.

A JUNIOR COMPANY IS NOT:

• It is not a recognised commercial company, such as an SA, an SL or a Cooperative.
• It is not a normal company, as it does not carry on a commercial activity.
• It does not have a legal personality of its own, beyond that of any association.
• It is not based on the investment of its members, nor does it aim to obtain an economic return.

Simply put, a Junior Enterprise has the same motivation than any student project or any non-profit organisation.

TO SET UP A JUNIOR ENTERPRISE, STUDENTS SHOULD FOLLOW THE STEPS BELOW:

1. Form a group of students interested in creating a university company and define the objectives and mission of the junior company.
2. Seek support from the university or a national or international junior enterprise organisation.
3. Develop a detailed business plan, including a marketing strategy, a financial analysis and an operational plan.
4. Seek funding for the junior enterprise, either through grants, sponsorships or investors.
5. Register the junior company with the relevant authorities and obtain the necessary permits.
6. Start operating and developing projects.
7. Constantly evaluate the junior company's performance and make changes and improvements where necessary.

It is important to note that the requirements and procedures may vary depending on the country or university where the junior company is located. It is recommended to consult a legal expert or the university or junior company organisation for detailed information.

Incorporation of a Junior Company

For its constitution, students must express their desire to form the association in the Founding Act and approve its statutes. This document will include the number of founding members and their rights and duties. Next, the association will be registered in the Provincial Register and in the National Register and finally, the company must be admitted to the CEJE: a confederation that brings together and represents all junior companies in Spain.

Like a conventional company, a junior company will have an identification code (CIF), as well as a fiscal address to receive notifications. As a special feature, the junior company is governed by its Board of Directors, by its statutes and by the internal regulations that have been drawn up, and therefore the organisation, conduct and operation of a junior company can be very different from that of another. Finally, it should not be forgotten that Junior Enterprises are created and managed by students, which means that they cease to belong to them when they graduate or end their affiliation with the University. The process of registering a junior company may vary depending on the country or university where the junior company is located.

IN GENERAL, STUDENTS SHOULD FOLLOW THE STEPS BELOW:

1. Draw up the statutes or the necessary documents describing the mission, objectives and functioning of the junior enterprise.
2. Submit an application for registration to the relevant authorities, which may be the university, the local government or a national or international junior enterprise organisation.
3. Provide information on the founding members of the junior company, including their names, surnames, addresses and identification numbers.
4. Submit a detailed business plan (+) and a financial analysis showing how the junior enterprise plans to finance and develop itself.
5. Pay the corresponding fees or taxes.
6. Obtain a company name and a unique business identification number.
7. Create an organisational structure and designate the heads of the different departments or areas of the junior enterprise.

It is important to note that requirements and procedures may vary depending on the location of the junior company.

JUNIOR COMPANY RECOGNITION

The Spanish Confederation of Junior Enterprises (CEJE) establishes two requirements to recognise a junior enterprise:

• HAVE JUNIOR COMPANY APPLICANT STATUS, WHICH MEANS:

  • To be constituted and registered as a non-profit university students' youth association.
  • Have full statutory and regulatory compatibility of aims and methods with those laid down by the federation to which it belongs and by the CEJE.
  • Be located in a university or similar educational establishment with the approval of the academic authorities.
  • Have organised at least one theoretical instructional event for the students of their faculty or school.
  • Have arranged and completed two training placements.
  • Have a favourable report from the board of directors of the federation to which the affiliation corresponds.

• THE DOCUMENTATION MUST BE PRESENTED AT AN EEJC MEETING AND THE JUNIOR MEMBER COMPANIES MUST VOTE IN FAVOUR OF IT, WHICH IMPLIES:

  • Fulfil all the necessary points to become a junior company applicant.
  • To have arranged and completed three or more training placements, half of which shall be for the university or a body assimilated to it.
  • Have a favourable report from their federation.
  • Have a favourable report from the Confederation's Board of Directors.
  • Due to the above, we can often find youth associations operating under the name of Junior Enterprises without yet being recognised as such. However, this recognition does not confer any legal status nor is it based on any specific regulations, and will therefore simply produce benefits for whoever obtains it in terms of publicity, participation and prestige.