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Incorporation Of Company

The company law in Italy is governed by Art. 2472 ff. and Art. 2325 ff. of Codice Civile. In general terms Italian Law prescribes two forms of companies having limited liability: (i) limited liability company or S.r.l., which stands for (società responsabilità limitata); and (ii) joint stock company or S.p.A. (società per azioni).

NATURE OF COMPANY

Both S.p.A. and S.r.l. are limited liability companies, but only in the case of joint stock company the share capital is divided into shares, which are embodied in stock certificates. In case of S.r.l. the capital is divided into "quotas", which are only recorded in the 'quotaholders' book. Naturally, quotas are also transferable by means of appropriate instruments to be recorded in the 'quotaholders' book.

Most of the regulations concerning the incorporation and management of an S.p.A. also apply to an S.r.l. In fact, although there are certain regulations, which apply specifically to the latter, broadly speaking, an S.p.A or an S.r.l can be both used to serve as a company having limited liability in Italy.

Each of S.r.l and S.p.A may be converted into the other type of company by resolution of a special quota/shareholders' meeting.

REQUIREMENTS FOR THE INCORPORATION OF A LIMITED LIABILITY COMPANY

The following are required for the purpose of incorporation of a Limited Liability Company:

1. It may be owned by more shareholders or by a sole shareholder.
2. The minimum capital required for a Srl is of Euro 10,000.
3. The shareholders' contributions must be in cash, unless the deed of incorporation provides otherwise. Any type of asset which can be economically evaluated can be the object of a contribution. If a contribution is in kind, or consists of a credit, a report of an expert must be submitted. A contribution can also consist of an insurance policy or a bank guarantee.
4. The deed of incorporation must be made before a public notary. The Italian Civil Code provides a list of all the information, which must be embodied in the deed of incorporation, to which the by-laws of the company shall be joined.

PROCEDURE FOR INCORPORATION OF LIMITED LIABILITY COMPANY (S.R.L)

For incorporating a new S.r.l. each quotaholder may appoint attorneys-in-fact in order to be represented. Such powers of attorney must be signed before a Notary, whose signature, in case of a foreign Notary, must be legalized by Apostille. It is possible to incorporate a S.r.l. with a sole quotaholder. In such case, if the company is insolvent the sole quotaholder shall be responsible for all liabilities of the company.

NAME OF THE COMPANY

To incorporate a Limited liability company one need to apply for a suitable name for the company. There is no fees require to avail a name; but one needs to submit company form prescribed by the registry of company.

DEED OF INCORPORATION

The Deed of Incorporation of an S.r.l. consists of a Certificate of Incorporation and By-Laws. In the said documents at least the following details must be provided:

1. all data identifying each quotaholder and the part of capital subscribed by each of them;
2. the name of the company and the address of the legal office;
3. a complete description of the purposes of the company;
4. the corporate capital;
5. name of those who have the power to represent the company and those who have to audit it;
6. the approximate costs borne by the company for the incorporation.
7. The minimum capital requirement for a S.r.l. is €10,000 (ten thousand Euro) Italian law requires that at least 25% (twenty-five per cent) of the subscribed capital be deposited with a Bank in Italy before the Deed of Incorporation is executed. However, in the case of a sole quotaholder, Italian law requires that the entire capital be fully paid-in at the time of the incorporation. The Bank will issue a certificate as to the deposit to be attached to the Deed of Incorporation. In order to avoid possible problems, in the event of non-resident quotaholders, capital should be remitted from abroad and negotiated approximately one week before the date of incorporation.

REGISTRATION

Registration with the Register of Companies is done by a Notary, who files the incorporation deed with the Register of Companies. Once the Company is registered with the Register of Companies it acquires its legal status according to Art. 2331 of the Italian Civil Code. If any transactions are carried out in the name and on behalf of the company prior to its registration, those who have so acted are unlimitedly, jointly and severally responsible.

Indeed, to effect the public registration of the S.r.l. in the Register of Companies, each director (or the sole director) must sign a Chamber of Commerce form, which should be deposited within 30 (thirty) days of the date the Notary signs the incorporation deed of the new company.

In general, both the foreign quotaholders and their legal representatives shall elect tax domicile in Italy and shall apply for a fiscal code in Italy (codice fiscale). The fiscal code in Italy functions in many respects as an ID Number of a Social Security Number.

FEES OF INCORPORATION

Apart from fee for execution of public deed before notary an amount of 2,500 EUR is required to be paid and there is no other fees to be paid for the purpose of incorporation of fees.