Reserves are profits obtained by the company, which are not distributed among its owners. They are kept for the company in case it has extra expenses in the future.

With FacturaDirecta, your company will have a professional invoicing system. Create an account.

The concept of reserves is included in the balance sheet and generally reserves are accumulated by companies in order to prevent future expenses.

Reserves normally come from company profits and are part of equity.

What types of reserves exist?

• Legal reserve: All companies are obliged to leave 10% of their profits to this reserve. It is mandatory savings for the company according to Law.

• Statutory reserves: The bylaws oblige companies to create their own reserves. It is mandatory savings for the company according to its own bylaws.

• Share reserves: They are shares acquired by other people in which, in order not to lose a part of the share capital for a time, the shares have an unavailable character.

• Special reserves: These are those reserves established by legal provision with mandatory character, but which are different from those included in other accounts.

• Voluntary reserves: It is the company or corporation itself that establishes the reserves it wants to have, so it can reserve the amount it wants if the company has had profits.

We hope this information is very useful to you.