International corporations from all over the world use Italian corporate entities for their subsidiaries operating in Italy. Italian Limited Liability Companies are commonly used as SPV in transactions of different nature ranging from real estate projects to M&A and restructuring.
In Italy, there are different types of corporate entities that may be incorporated depending on the size and features of the business intended to be carried out as well as the wishes of the participants in relation to their personal liability for the obligations of the company and the mechanics for the management thereof.
The two most popular forms of corporate bodies are:
a) "Societe per Azioni" (S.p.A) - Joint Stock Company (equivalent to a plc in the
UK.)
b) "Societe a responsabilita limitata" (S.r.l.) - Limited Liability Company
Provided that it is a common intention of the majority of the entrepreneurs to operate using a limited liability corporate entity, an S.p.A. is usually more appropriate for a medium to big business venture that typically provides for a large number of participants and need rigid and comprehensive organisational structure and regulation. An S.r.l. would be used for small to medium-sized businesses.
The incorporation of a SRL in Italy involves a relatively straightforward process, it is relatively inexpensive (the minimum share capital is !10,000, out of which only the 25% has to be paid up front and it may be returned to the company once incorporated) and the participants may benefit from a flexible organizational structure to be shaped depending on their own needs. Also, the Italian law does not require for the S.r.l. to comply with administrative activities and procedure to be carried out periodically (other than the submission of the Balance Sheet and Profit and Loss report).
The main steps involved in a company formation process in Italy involve:
- Obtaining the Italian fiscal code of the participants
- Payment of the prescribed share capital from a temporary bank account
- Drafting the relevant corporate documents (Articles of Association and By-Laws)
- Completion of the incorporation process before an Italian Notary Public
- Application for the company's IVA number (equivalent to English VAT)
- Registration of the deed of incorporation at the competent Italian Registry of the Entrepreneurs
The timeframe likely to be involved for the incorporation of an S.r.l. - starting from the registration in the Public Registry of Entrepreneurs when the company will be 100% operative - is three to four weeks. The incorporation process of an S.p.A. is likely to involve a little more than that.
Giambrone Law assists clients in any of the abovementioned phases that lead commented: "We often offer to have our lawyers to act as special attorneys on behalf of the participants for the purpose of carrying out the activities which are necessary and instrumental to the incorporation and attending before the Italian Notary Public for completion of the deed of incorporation."
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
