The Incorporation and First Establishment Expenses are a series of expenses necessary to start a business activity. They are the first expenses that a company has before starting to work. On the one hand there are the legal expenses, and on the other the expenses that will allow us to start our main activity.
The Incorporation Expenses refer to the expenses of the notary, the commercial registry, which will depend on whether the company is Limited Liability Company o Sociedad Anónima, permits or other types of taxes.
The First Establishment Expenses refer to the investment made in the first moments of the life of the so that it can start to develop, such as initial advertising, contracting projects or market studies or any type of expenses that help start the company.
Previously, these expenses were considered assets, but in the new General Accounting Plan the initial establishment expenses are part of the normal expenses in the Profit and loss account, while the Constitution Expenses pass to the company's Equity.
Know all the necessary information about the incorporation expenses and how they are accounted for in the accounting books.