In Italy, the limited liability company (S.r.l.) is one of the company forms most chosen by entrepreneurs.
Its popularity is linked to a combination of advantages: management flexibility, asset autonomy, limited liability of members and relatively low initial costs.
However, setting up an S.r.l. requires compliance with an articulated procedure, punctuated by a series of formal, fiscal and organisational formalities.
Let us therefore see what the main steps and fundamental elements are for correctly constituting a limited liability company.
The first step is the drafting of the articles of incorporation, which must be in the form of a public deed and drawn up by a notary public. As an alternative to physical presence, from 2021 the law also allows incorporation by videoconference, provided that all members have qualified digital signatures.
The memorandum of association contains the essential information for the establishment of the company such as:
- the name;
- the registered office;
- the corporate purpose (understood as the economic activity that the company intends to carry out);
- the personal data of the shareholders and directors;
- the duration of the company;
- the share capital and how it will be subscribed;
- the appointment of corporate bodies, if any;
- an indication of the method of administration (e.g. Sole Director or Board of Directors).
Alongside the memorandum of association, there is the statute, which may be an autonomous document or integrated into the memorandum of association. The articles of association define the company’s rules of operation, including:
- the social activity;
- the procedures for convening and conducting meetings;
- constitutive and deliberative quorums;
- the criteria for the distribution of profits;
- any special rights granted to individual members;
- rules for the transfer of corporate shares;
- any pre-emption, approval or option clauses in favour of other shareholders;
- causes for the exclusion or withdrawal of a shareholder.
The drafting of articles of association is a crucial moment: a standard, generic or poorly articulated articles of association can generate rigidity or deadlocks.
It is therefore crucial to tailor it to the specificities of the business project and the balance between the partners.
The minimum share capital to set up an S.r.l. is EUR 10,000.
However, the law also allows incorporation with a lower capital, as long as it is not less than one euro, subject to the following conditions:
- capital of less than EUR 10,000 must be fully paid up in cash at the time of incorporation;
- 20% of the profits must be set aside annually to the legal reserve, until the threshold of EUR 10,000 is reached.
Contributions may be made in cash or in kind. In the latter case, a sworn appraisal report by an expert is mandatory.
If the share capital is EUR 10,000 or more, it is sufficient to pay 25% of the subscribed capital upon incorporation, except in the case of single-member companies, where full payment is required.
The share capital also represents the maximum measure of economic risk for the shareholders, who are liable for corporate obligations to the extent of their share.
Once the deed of incorporation has been signed, the notary registers the deed with the Internal Revenue Service and enters it in the Commercial Register kept by the competent Chamber of Commerce.
With this registration, the limited liability company acquires legal personality and becomes an autonomous entity, distinct from its shareholders.
In addition, the corporate offices and powers of the directors are officially filed.
The legislation also requires the company to have
– a company PEC that serves as its digital domicile and is registered in the Company Register;
– a personal PEC of the director, useful for receiving notifications from the PA.
With the Single Communication, the set of fulfilments necessary for the start-up of the activity is discharged in a single operation, and therefore
– the attribution of the VAT number by the Inland Revenue Agency;
– registration with INPS;
– registration with INAIL;
– the communication of the company’s PEC.
It should also be borne in mind that upon start-up, the company must certify the mandatory company books. The endorsement can be carried out at the Revenue Office or through a notary public.
Thereafter, the company must comply with all periodic accounting and tax obligations, including:
- the keeping of accounting records and VAT registers;
- the submission of tax returns;
- the payment of taxes;
- drafting and approving the annual accounts.
Setting up an S.r.l. is a strategic choice that allows one to combine asset protection, commercial credibility and organisational flexibility.
Each stage – from drafting the articles of association to accounting management – must be planned and followed carefully.
We therefore advise you to turn to us right from the incorporation phase, in order to draw up articles of association consistent with the objectives of the partners, choose the most suitable tax and accounting regime, avoid mistakes and uncertainties in interpretation, and start a business activity in compliance with the regulations in force.
Only with a solid foundation can you build a competitive company, ready to face the challenges of the market.
We remain at your disposal for any further clarifications.