Doing Business in Italy: Incorporating a limited company in Italy

There are two main types of incorporated entities in Italy:

1. Società per Azioni (‘SPA’), a company limited by shares, and
2. Società a Responsabilità Limitata (‘SRL’), a company limited by ‘quotas’ (SRLs do not issue shares).

Prior to the Company Law reform (Legislative Decree No 6 of 17.01.03), SRL’s were regulated as ‘minor SPAs’ . The reform substantially modified the SRL making it far more flexible and is now treated more like partnerships while retaining limited liability for its quotaholders.

How to set up an SRL

Incorporation

The deed of incorporation must be in the form of a public act that includes the following information:

• names and addresses of partners (if they are companies, their registered office must be disclosed)
• name of the company (which must include the words ‘società a responsabilità limitata’)
• town where the registered office of the company is located
• the activity the capital amount (which cannot be lower than €10,000)
• the payments made by each partner and the value of
• contributions in kind or in receivables
• the quota of capital paid by each partner
• the rules governing the company, including control of
• accounts and the power to represent the company
• the number and the names of the company’s directors
• company’s intended duration

An SRL can be incorporated with a single partner (company or individual), or can become a single partner company at any time during its existence. The sole partner has unlimited liability for the company’s obligations only if the proper information has not been given to the companies’ registry or for non-compliance with rules on contributions.

Incorporation Cost

In respect of capital contributions, the reform has broadened the list of assets that can be contributed to the capital from just receivables, cash and goods to an array of intangibles, such as labour, services and know-how.

The partners are required to (i) appoint a registered auditor to value all contributions and must also give a guarantee for an amount not less than the value of the subscribed capital. This can be provided by means of insurance policies or cash deposits.

At least 25% of cash contributions must be paid before the company’s incorporation and deposited into a dedicated bank account. If the company is incorporated by a single person, 100% of the capital must be paid up at the time of incorporation. Cash payments can be replaced by insurance policies or bank guaranties.January 10, 2015