The joint stock company under Italian Law
In Italy, one of the most common type of corporation is the joint stock company (S.p.A. Società per azioni), which may be assimilated to public limited company existing in Common Law countries. The S.p.A. is more appropriate for significant amount of capital and better suits large investors, as it allows to operate also in regulated markets.
Even more common but suitable for small businesses is the limited liability company (S.r.l. società a responsabilità limitata).
The S.p.A. has legal personality and a perfect patrimonial autonomy, which means that the shareholders are not liable with their personal assets, while the company is qualified as an entrepreneur, then liable for its obligations.
The minimum share capital is set at €50.000 and it is divided into shares embodied in stock certificates, which are freely transferable and allow the shareholder to vote during the shareholder meetings.
To set up an S.p.A. in Italy several requirements must be met. First of all, the company shall need at least one shareholder and it shall appoint a board of auditors.
- Minimum share capital of €50.000:
- If there is only one shareholder, the full amount shall be paid in;
- If there are more than one shareholders, only 25% of the set minimum share capital shall be paid in.
- Minimum one director;
- A board of auditors of at least 3 members (collegio sindacale).
Generally, there are no restrictions on foreign shareholders and investments, but a lawyer’s assistance is always required to check the exceptional and limited cases.
To incorporate an Italian joint stock company, a bank account in the name of the company has to be opened. Afterwards:
- Deed of incorporation and company’s bye-laws shall be executed before a Public Notary;
- Deed shall be entered in the Register of Companies at the Chamber of Commerce;
During this process, corporate and accounting books shall be purchased, and the necessary documents shall be submitted to the Chamber of Commerce;
The deed of incorporation and company’s bye-laws shall identify the type of company, the rights and obligations of the shareholders and the internal structure, in a word they set forth the corporate governance of the company.
It must be noticed that the company is effectively operating when registered in the Register of Companies. Acts performed on behalf of the company, before such registration, shall be considered as bringing to a personal liabilities of the individuals.
Differences between S.p.A. and S.r.l.
In the Italian limited liability companies (S.r.l.), the company’s capital is divided into quotas, each for company’s member, which cannot be embodied in negotiable instruments.
On the other hand, in the S.p.A. the share capital is divided into shares and one shareholder can have more than one share, which can be listed in the regulated market.
Main differences are:
- The minimum capital for S.r.l. may be €1 under certain circumstances. The minimum capital for S.p.A. is €50.000;
- In the S.r.l. directors may be appointed without time limits. In the S.p.A., they can be appointed for 3 years maximum;
S.r.l. is generally more flexible and less expensive than S.p.A., which is preferred for large investments (and required when setting up a financial institution). The S.r.l. can be converted into S.p.A.
VGS Corporate Lawyers can assist you in opening a joint stock company in Italy or to close one. Our Corporate Team will follow you from the initial business plan, up to the final registration.