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: Limited Liability Company or S.r.l. (societa responsabilita limitata) and Joint Stock Company or S.p.A. (societa per azioni).
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. Although there are certain regulations, which apply specifically to S.r.l., 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.
The minimum capital requirement for a S.r.l. is 10,000 EUR. Italian law requires that at least 25% 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 shareholder the entire capital must be fully paid-in at the time of the incorporation. In order to avoid possible problems, in case of non-resident shareholders, capital should be remitted from abroad and negotiated approximately one week before the date of incorporation.
The minimum number of shareholder for a S.r.l. is one. The shareholder does not need to be of Italian nationality or resident. For incorporating a new S.r.l., all shareholders must be present in person in front of a Notary in Italy to sign all company documents. Alternatively, Company Express can arrange for the shareholder(s) to issue a Power of Attorney to a lawyer (provided by Company Express) to enable the lawyer to sign all documents on behalf of all shareholders. In this way, the shareholders do not have to be present in person before a Notary in Italy.
S.r.l's are managed by one or more directors. There are no requirements for directors to be of Italian national or resident. However, it is advisable that at least one director is an Italian resident, particularly if the company is to perform a commercial activity. A secretary is not required by Italian law.
All the companies with a capital equal or exceeding 120,000 EUR (and thus all S.p.A.) must have a board of statutory auditors, comprised of 3 statutory members and 2 alternate members. Even if the company has a capital of only 10,000 EUR a founder, in view of the importance of the company, may wish to appoint such board upon incorporation. The Auditors' fees according to applicable law are proportional to the company's capital.
After incorporation, the new company must apply for a VAT number and adhere to certain fiscal requirements. Company Express can arrange for the VAT registration and the accounting matters are usually handled by an accountant to be appointed by the new company. Company Express can provide these services also.
Annual Taxation and Fees
S.r.l's are required to prepare annual accounts, including a Balance Sheet, a Profit and Loss Statement and an Integrative Note, which must be approved by a shareholders' meeting within 4 months from the end of its financial year. Thereafter the company's balance sheet needs to be filed with the Registrar of Companies.