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Limited Liability Company - Società a responsabilità limitata

Joint-Stock Company - Società per Azioni

What is the main source of law authorising this entity form?

Italian Civil Code, Book 5, chapter VII (“Codice Civile, Libro V, Capo VII

Give a brief summary of the entity form:

Does the entity possess separate legal personality?

The S.r.l. has separate legal personality.

(Maximum) period of existence

The deed of incorporation might provide determined or undetermined period of existence.

Governing document(s)

The S.r.l. is governed by: (i) the deed of incorporation and (ii) the articles of association.

Liability of incorporators / shareholders

The S.r.l. is liable for the company’s obligations exclusively with its own assets. Quotaholders are required only to pay-in the subscribed corporate capital.

Specific rules are provided in case of sole quota holder (e.g., fully paid-up corporate capital; certain disclosure duties have been fulfilled at the Companies’ Registry (“Camera di commercio industria artigianato e agricoltura”) regarding the sole quota holder). A breach of such rules can trigger the sole quota holder’s unlimited liability. Finally, incorporators could be liable for the transactions performed on behalf of the S.r.l., and with their consent, prior to finalization of the registration of the entity with the Companies’ Registry.

(Governing) bodies

The necessary corporate bodies of a S.r.l. are:

  1. the Quotaholders’ Meeting (“assemblea dei soci”);
  2. the directors or the Board of Directors (if applicable) (“amministratori” or “Consiglio di Amministrazione”);
  3. A (voluntary) Statutory Auditor (“organo di controllo”).
Other particularities

The voluntary Statutory Auditor can be provided by the article of association. The appointing of a Statutory Auditor becomes mandatory in case certain requirements provided by the law are fulfilled.

Can this type of entity be involved in international transactions and restructurings (e.g. cross border mergers, asset acquisitions, equity acquisitions, etc.)?

Under Italian law, S.r.l. can be involved into international restructuring operations such as merger and acquisition, according to specific legislation (cross border mergers EU regulations within the EU) or pursuant to Italian international private law.

Can this type of entity be publicly listed or held?

No, only a S.p.A. can be listed.

Can this type of entity be used for a non-profit or charitable organization?

No, a S.r.l. can only be a profit-making entity.

Give a brief summary of the process of incorporation, formation, or organization, including:

Main documents required

The notarial deed of incorporation, together with the company’s articles of association, must be executed before an Italian notary. It must be executed in Italian. The deed can be executed pursuant to a notarized and legalized power of attorney of the incorporator(s).

The ID documents and tax codes of the directors and quotaholders are required for the registration of the directors and quotaholders.

Involvement of notary, company register, governmental authorities

The S.r.l. must be registered with the Companies’ Registry and is fully incorporated only from the registration date. The registration formalities vary.

No governmental authorization is required, unless such authorization is required by the law (e.g., financial intermediary).

Timing (estimate)

Depending on the city where the entity is incorporated, typically these formalities require between 2-7 days starting from the incorporation and are fulfilled by an Italian Notary Public.

Main costs, including registration and similar fees (excluding legal fees)

The main costs are the (i) legal/notarial fees, (ii) duties and stamps related to the incorporation deed, and (iii) registration costs at the Companies’ Registry.

Is a description of the anticipated business or purpose of the entity required for incorporation, formation or organization?

The corporate purpose must be stated in the articles of association and filed with the Companies’ Registry. Moreover, the incorporation of the S.r.l. shall be communicated to the Italian Revenues’ Agency (“Agenzia delle Entrate”). On this occasion, the purpose of the S.r.l. shall be disclosed in greater detail in order to receive one or more codes (that refer to the activity/activities of the company).

Please note that a S.r.l. may also be incorporated in a simple form (“Società a Responsabilità Limitata Semplificata”), which provides, among others, a minimum value of the capital and articles of association that is fixed by law.

Minimum number of incorporators / shareholders and residency requirements

There must be at least one incorporator upon incorporation and there is no residency requirements for incorporators. However, in case of foreign incorporators (other than from the EU or other states that signed a bilateral agreement with Italy), certain reciprocity conditions must be met.

Minimum number of directors (or other applicable officers) and residency requirements

There must be at least one director upon incorporation and there are no residency requirements for directors for legal purposes. However, in case of foreign directors (other than from the EU or other states that signed a bilateral agreement with Italy), certain reciprocity conditions must be met.

Minimum share capital, or equivalent, and payment requirements (including opening a bank account)

Minimum corporate capital value is EUR 10,000. Cash and in-kind contributions are permitted. In case contributions are made in cash, and if the S.r.l. has more than 1 quotaholder, the quotaholders can pay-in only 25% of the total amount of the contribution. In such case, the directors will call the residual contribution to be made.

A cannot have a corporate capital in excess of EUR 9,999. In this case, a contribution must be done in cash and fully paid-up. Higher part of profits must be reserved until a minimum provided by the law is set.

Is the physical presence of incorporators / directors required in the jurisdiction for incorporation, formation or organization?

The physical presence of quotaholders-incorporators is not required, as the execution of the notarial deed of incorporation may be carried out by virtue of a power of attorney. An attorney in fact must attend the incorporation meeting in person.

The presence of the directors is not required at all for the incorporation of the company.

Is a tax identification number, or equivalent, required? If so, how is it obtained?

The Companies’ Registry issues a tax identification number (“codice fiscale”) and VAT number of the S.r.l. upon the registration of the company. Quotaholders and directors must have a tax identification number as well. A form must be submitted to the Italian Revenues Agency (“Agenzia delle Entrate”). The tax identification number will be issued in a few days. Applying for an Italian tax identification number does not automatically trigger any tax liability.

What is the title of the applicable company registry?

Companies’ Registry (“Camera di commercio industria artigianato e agricoltura”)

What types of information must be filed at the (company) register, and which of them will it be publicly available, e.g.:

The information listed below must be filed at the Companies’ Registry and is publicly available:

  • Articles of association
  • Date of incorporation
  • Name and address details of the company (including the local units and branches)
  • The activities of the company
  • Corporate capital (issued and paid up)
  • Liens and encumbrances on the quota of the partners
  • Liens and encumbrances on the ongoing concerns of the company
  • Directors and their representative authority, including birth and address details
  • statutory auditors, if any, including birth and address details
  • Sole quotaholder (if applicable)/quotaholders and their address details, group or entities that exercise direction and coordination over the company
  • Information regarding insolvency procedures
  • The annual accounts
  • Amendments to the company’s articles of association (e.g., mergers and demergers, liquidation, capital increase etc.)


What is the title of the executive body and its members? What are their main duties, tasks and responsibilities?

As management body of the company, the company may choose between a sole director (“amministratore unico”), separate directors (“amministratori disgiunti”) and the Board of Directors (“consiglio di amministrazione”). The number of directors is set in the articles of association. In the latter, decisions of the Board of Directors are held by a majority. The articles of association might also provide the joint or individual power of authority for directors in relation to the management of the company.

The management body has the widest powers for the ordinary and extraordinary management of the company and has the power to perform all actions it deems necessary for attaining the corporate purpose, excluding only those powers that the law mandatorily reserves to the competence of the Quotaholders’ Meeting.

How are the members of the executive body appointed, dismissed and replaced?

The directors are appointed upon incorporation of the company pursuant to the deed of incorporation. From then on, the directors are appointed by the Quotaholders’ Meeting.

Directors can be appointed for a fixed period or an undetermined period.

In case of an appointment of a Board of Directors, should:

  1. during a fiscal year one or more directors cease their office, the Board of Directors may provide their temporary replacement (so called “cooptazione”). The appointed director(s) shall remain in charge until the next Quotaholders’ Meeting.
  2. the majority of the directors cease to be in charge, due to resignation or any other reason, the appointment of the directors replacing the ones ceased must promptly be submitted to the Quotaholders’ Meeting.

Moreover, the appointment of directors may be revoked by the Quotaholders’ Meeting at any time, without prejudice to the right to obtain damages by the director if the appointment was revoked without just cause (“giusta causa”).

Is it possible to appoint corporate directors or must all directors be natural persons?

Yes, quotaholders may resolve to appoint corporate directors.

Is there a requirement to have non-executive directors? How are they appointed, dismissed and replaced? Do non-executive directors serve on a separate body (two-tier structure) or can a one-tier board (with executive and non-executives) be appointed, or is some alternate structure used?


What is the title of the body of owners / shareholders / members, and what are the main tasks / responsibilities / powers of that body?

The quotaholders decide on the matters reserved for their competence by the articles of association, by the Italian Civil Code, as well as on the subjects that one or more directors or the quotaholders representing at least one third of the corporate capital submit to their approval.

In any case, the following are reserved for the quotaholders’ competence:

  1. the approval of the annual account and the distribution of profits;
  2. the appointment, if provided in the deed of incorporation, of the directors;
  3. the appointment, in the cases provided for by article 2477 of the Italian Civil Code, of the Statutory Auditors and the chairman of the Board of Statutory Auditors or the person appointed to carry out the statutory audit;
  4. any modifications to the deed of incorporation;
  5. the decision to carry out transactions that involve a substantial change in the corporate purpose as determined in the deed of incorporation, or a significant change in the rights of the quotaholders.

The deed of incorporation may provide that the decisions of the quotaholders are to be adopted by written consent. In this case, the documents submitted by the quotaholders must clearly show the subject matter of the decision and its consent (written consultation or written issued consent).

If the articles of association provide no alternative way of the adoption of the decision of the quotaholders, in any case, with reference to the matters indicated in the above numbers 4) and 5), as well as in the case of the fourth paragraph of article 2482 bis of the Italian Civil Code, or upon request of one or more directors or a number of quotaholders representing at least one third of the corporate capital, the decisions of the quotaholders must be adopted by way of a Quotaholders’ Meeting resolution.

Quotaholders are liable, jointly with the directors, for damages caused to the company due to resolutions held by the quotaholders, in breach of law or provisions of the article of association.

What are the majority and quorum requirements for decisions by the shareholders? Can they be varied or changed?

In case of resolution held by a Quotaholders’ Meeting, the Quotaholders’ Meeting is able to resolve with the participation of quotaholders representing at least, half of the corporate capital and resolution are held with the consent of the majority of the corporate capital represented in the Quotaholders’ Meeting.

In any case, resolution upon matters indicated in the above numbers 4) and 5) must be held with the favorable vote of quotaholders representing half of the corporate capital.

Any special governance regimes (e.g. depending on size, being listed at a stock exchange, or other criteria)?


What are the periodic accounting obligations incumbent upon the entity? To whom must those accounts be submitted?

The company must maintain accounting records that are sufficient to determine the financial position of the company at any moment. Within 120 days (with possible extension to 180 days) of the financial year of the company the annual accounts must be drafted by the managing directors and subsequently approved by the Quotaholders’ Meeting.

The (adopted) annual accounts must be filed with the Companies’ Registry.

Is the entity permitted to determine its own financial year?


Is the entity subject to any statutory (external) auditor obligations?

A S.r.l. can be obliged to appoint an external auditor (see next answer), in order to have its financial statements externally audited each financial year.

Requirements to appoint other persons (officers, secretary, internal auditor / accountants). If so, what are their functions? Are there any residency requirements?

The deed of incorporation may provide for, determining its competencies, including the statutory audit, the appointment of a Board of Statutory Auditors (“Collegio Sindacale”) or a sole auditor (“Sindaco Unico”).

The supervisory body must control that the management body carries out its activities in compliance with the law, the articles of association and the principles of proper management. Furthermore, the supervisory body can be responsible for the accounting audit: in this case, the supervisory body must meet specific requirements (an independent expert person or an auditing firm registered with the specific registry).

The legal accounting audit mainly entails the duties to verify, on a quarterly basis, the keeping of accounts and the correct recording in the accounting records of operations, and in double verification of the annual financial account and the consolidated ones (if any). The legal accounting audit also include the examination on the correspondence of these documents to the accounting records.

Furthermore, please note that the articles of association of companies who (i) are not obligated to report the consolidated financial account and (ii) are not operating within the security market, can also delegate the legal accounting audit to the Board of Statutory Auditors. In such case, all its members must be registered with the legal accounting auditors’ registry. There are no residency requirements, only professional competence and reciprocity requirements.

The appointment of the supervisory body or auditor is mandatory if the company:

  1. is required to prepare the consolidated financial statements; or
  2. controls a company that is obliged to audit its accounts; or
  3. has exceeded one of the following limits for two consecutive financial years:
    1. total assets in the balance sheet: EUR 4 million;
    2. revenues from sales and services: EUR 4 million; or
    3. employees employed on average during the year: 20 units.

The obligation to appoint the supervisory body or the auditor referred to in letter c) ceases to exist if the aforesaid limits are not exceeded for three consecutive financial years.

In the case of the appointment of a supervisory body, even single-member, the provisions on the Board of Statutory Auditors envisaged for joint-stock companies shall apply.

The meeting that approves the financial statements in which the limits indicated in the second subparagraph are exceeded must, within thirty days, provide for the appointment of the supervisory body or the auditor.

If the meeting does not provide, appointment is held by the Court upon request by any interested party or by the Registrar of the Companies.


What is the title designated for 'ownership interests' (e.g. shares, quota, interests, membership)?

Quota (“quota”).

Are different classes of ownership interests possible? If so, what are some examples of different classes?

The article of association of a S.r.l. can grant specific management rights and/or specific rights over profits to named quotaholders. Modification of such rights must be resolved with unanimous consent of the quotaholders.

What documentation is required for the transfer of ownership interests?

Quota is transferred upon a transfer deed signed by the parties. Transfer is acknowledged by the company after the registration of the transfer deed with the Registry (“Camera di commercio industria artigianato e agricoltura”). The deed of transfer can be filed by an Italian notary public or an accountant (the latter only in case parties own specific electronic signatures called in Italian “firma digitale”).

Are there any additional formal requirements required for the transfer of ownership (notary, approvals, stamping, filings, corporate records)?

See above.

Are there any applicable stamp duties imposed when transferring ownership interests?


How are shares issued? (including information on payment obligations, registration requirements)

Under the Italian law a S.r.l. does not issue Quotas. Rather, an increase of corporate capital could be resolved by the extraordinary Quotaholders’ Meeting of the company, to be held in front of an Italian notary public, which quotaholders’ resolution shall then be filed with the Companies’ Registry.

Further information on equity contributions, e.g., non-cash payments on shares, (share premium) contributions without issuances of shares, can partially paid shares/ownership interests be permitted and what are the restrictions on them?

The value of the contributions cannot be overall less than the total amount of the corporate capital.

All asset items that may be subject to economic assessment can be transferred. Typically, contributions are made in cash. At the signing of the deed of incorporation, quotaholders must pay-up at least 25% of the contributions in cash or, in the case of a single incorporator, the full amount of the contributions must be paid-up.

The payment can be replaced by the stipulation, for a corresponding amount, of an insurance policy or a bank guarantee with the characteristics determined by decree of the President of the Council of Ministers (this also applies in case the contribution, assumed by the quotaholder, consists of the provision of work or services in favor of the company); in this case the quotaholder may at any time replace the policy or the guarantee with the payment of the corresponding amount in cash.

The equity contribution consisting of goods and credits must be fully paid-up at the time of subscription.

If the quotaholders are reduced to only one, the payments still due must be made within ninety days.

Any requirements with respect to share cancellation, share repurchase and other capital reductions

The S.r.l. cannot purchase its own quota.

Reduction of the corporate capital: regarding the reduction of excess corporate capital, the Italian Civil Code provides that such reduction can be effected either by releasing the quotaholders from the duty of making outstanding payments still owing, or by reimbursing capital to the quotaholders, within the limits of the minimum corporate capital. Please also note that the creditors of the company have the power to oppose the related Quotaholders’ Meeting resolution within 90 days.

In case the company incurs in losses higher than 1/3rd of the corporate capital, but which losses do not result in the corporate capital falling below the minimum capitalization provided by the law, the directors must convene without delay a Quotaholders’ Meeting which shall resolve to take “appropriate measures” and must provide the quotaholders with a directors’ report on the financial situation of the company (substantially an updated balance sheet) together with the remarks of the Board of Statutory Auditors, if any. The measures to be taken are the following:

  • taking immediate remedial actions (e.g. by covering the losses through a recapitalization, meaning to reduce the corporate capital and to simultaneously increase it to the original amount/ a different amount or by means of a capital injection); or
  • postponing any decision on such remedial actions until the end of the following financial year (this frequently occurs when the quotaholder is confident that the losses - or part of them - may be covered within one year). If at the Quotaholders’ Meeting approving the annual financial account of the following financial year, the losses did not diminish below 1/3rd of the corporate capital, the losses must be covered through a recapitalization.

In case the company incurs in losses higher than 1/3rd of the corporate capital, and which losses also result in the corporate capital falling below the minimum capitalization requirements, the directors must convene without delay a Quotaholders’ Meeting in front of an Italian notary public, which shall resolve to (i) recapitalize or, theoretically, (ii) transform the company in a partnership or (iii) dissolve the company.

Any requirements with respect to distributions to shareholders?


The resolution upon the distribution of profits is adopted by the Quotaholders’ Meeting that approves the annual financial account (i.e., once a year).

No dividends can be paid on quotas except out of the profits actually obtained and shown on the regularly approved balance sheet.

If a loss in the company’s corporate capital occurs, no distribution of profits can be made until the capital is reinstated or reduced with a correspondent amount.

The payments made in breach of the above provisions cannot be recovered if the quotaholders collected them in good faith and on the basis of regularly approved annual financial account, from which corresponding net profits result.

Payments on account of dividends

They are admissible only to those companies whose balance sheet is subject by law to the legal control of audit companies.

Payments on account of dividends must be allowed by the articles of association and are resolved upon by the directors - after receiving a positive opinion on the annual financial account of the previous fiscal year and on its approval by the audit company.

Payments on account of dividends are not permitted when the last approved annual financial account show losses relating to the fiscal year or the previous fiscal years.

The number of payments on account of dividends cannot exceed the amount of the profits accrued since the close of the previous fiscal year, reduced by the proportions which shall be set aside as a reserve pursuant to law or the articles of association or the amount of the available reserves, whichever is lower. The directors shall resolve on payments on account of dividends on the basis of an accounting prospectus and of a report showing that the patrimonial, economic, and financial situation of the company permits such payments.

The opinion on these documents of the subject entrusted with the legal control over the accounting must be obtained. Copies of the accounting prospectus, the report of the directors and the opinion of the subject entrusted with the legal control over the accounting shall be kept on deposit at the registered office of the company until the approval of the accounts of the current fiscal year. The quotaholders can examine them.

Even if the non-existence of the profits shown in the prospectus for the relevant period is subsequently determined, payments on account of dividends disbursed in conformity with the other provisions of this Section cannot be recovered if the quotaholders collected them in good faith.

Can the owners or shareholders adopt a restrictive or governing agreement among themselves such as a Shareholders Agreement?

Yes. The provisions in such agreement should not contradict the articles of association, but additional and/or more detailed provisions are allowed. The breach of the articles of association is opposable vis-à-vis third parties, whereas the breach of the quotaholders’ agreement, which is a private agreement, entitles only to the compensation for damages.

Which are the typical annual maintenance costs of maintaining the existence and legal good standing of such an entity (excluding legal fees)?

Each year, the directors shall approve the draft annual account and then the Quotaholders’ Meeting shall adopt the annual account, and then the applicable tax filings must be made.

What are the general corporate tax rates? (Specify if there is a national versus local distinction).

As general rule Italian resident companies are taxed on their worldwide income and are subject to (i) national corporate income tax (“IRES”) at a rate of 24 %; and (ii) regional business tax (“IRAP”) at a rate of 3.9%. This last figure may vary according to the region involved (for instance, 3,9 % refers to Lombardia region).

Summary of any specific matters, e.g. recent or prospective major legal developments

Legislation regarding the publication of ‘beneficial ownership’ is not yet in force in Italy at the time of writing but is expected in the near future.

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