#Italian Corporate Law A brief introduction to certain ascpects of Italian corporate law

SPEECH BY Micol Mimun

#Italian Corporate Law – An Overview

“The most careful thing is to dare”

(Shimon Peres)

#What are the main forms of business vehicle used in Italy? Italian types of partnership (società di

persone):

# Simple partnership (società semplice)

# General partnership (società in nome collettivo)

# Limited partnership (società in accomandita semplice)

#Italian types of partnership (società di persone)

Why yes? # No minimum corporate capital is required, low costs for

incorporation and maintenance. Central role played by their partners.

Why not? # Under italian law (article 25, second paragraph, of

legisletive decree no. 179/2012), innovative startups are required to be set-up in the form of corporate capital (società di capitali) members of partnerships are jointly liable with their partnership and do not benefit from limited liability for the partnership's business (except for limited partners of Sas).

#What are the main forms of

business vehicle used in Italy? # Limited liability company (società a

responsabilità limitata) (SRL).

# Simplified limited liability company (società a responsabilità limitata semplificata) (SRLS).

#What are the main forms of business vehicle used in Italy?

# Joint Stock Company (società per azioni) (SPA).

# Company limited by shares (società in accomandita per azioni)(SapA).

# Limited liability company - Article 2462 of Italian Civil Code

# quotas

# minimum corporate capital of EUR10,000

# at incorporation, the capital shall be entirely subscribed by each participant. If more than 1 quotaholder, 25% of the company’s capital contributed in cash must be paid in. If 1 quotaholder the corporate capital shall be fully paid- in.

# the payment of the capital may be replaced by goods, credits or services.

# Limited liability company with

1 Quotaholder

# the company corporate capital shall be fully paid in at the time of incorporation (article 2464, paragraph 3, of the Italian Civil Code);

# the directors or the quotaholder itself shall provide the Companies’ Register with certain information on the sole quotaholder (protection for creditors)

#Limited liability company with one quotaholder

# If one of the 2 previous requirements is not fulfilled and the SRL becomes insolvent, the sole quotaholder shall be jointly liable with the SRL for any liabilities undertaken by the company in the period when all the quotas belonged to the sole quotaholder #!

# Simplified limited liability company - Article 2463-bis of Italian Civil Code # quotaholders = individuals (not

entities);

# capital requirements: € 1 up to € 9,999 Euro;

# capital to be fully subscribed and paid in at the time of the incorporation;

# contribution in cash only (no goods, credits or services to replace the payment of cash)

# What are the main advantages for a

startup to be incorporated under the form of limited liability companies?

# create and issue special categories of quotas;

# offer its quotas to the public; equity-crowdfunding on line portals,

# perform transactions on its own quotas;

# issue financial instruments (strumenti finanziari partecipativi) also against the contribution of work and services from its quota-holders or third parties.

# Simplified Limited liability company - Article 2463-bis of Italian Civil Code

# Advantages? Little amount required for the incorporation Euro 1 but less than Euro 10,000 (#but be careful!). No notary fees. No stump duties.

# Disadvantages? the capital shall be fully subscribed and paid in at the time of the incorporation (#not for all); the contribution shall be made in #cash only

•

•

# What about the joint stock company (SPA) ?

# shares

#minimum corporate capital of EUR50,000

# Company limited by shares (SAPA)

# has both limited liability shareholders and unlimited liability shareholders

# What are the main formalities for setting up a company?

# Drafting of a notarised deed of incorporation.

# Subscription and payment of the corporate capital.

# Appointment of the directors and, in certain cases, statutory auditors and auditing firm.

# What are the main formalities for setting up a company?

# Filing and registration with the competent Register of Enterprises (RoE).

# Directors and quotaholders must apply for an Italian tax code

# What are the main formalities for setting up a company in our jurisdiction?

#Please note!#

The incorporation is completed upon

registration with the RoE, when the company legally comes to existence as

a separate legal entity.

# What are the main legal requirements for the composition of a company's board of directors? # Sole director

# one or more directors with a single signature or joint signature.

# A board of directors

The quotaholders' meeting can freely determine the number of directors, if the number is not provided in the company's bylaws.

#What are the main legal requirements for the composition of a company's board of directors?

# The board of directors can be composed of individuals or legal entities.

# The company's shareholders or quotaholders can also be directors of the company.

# Directors are appointed at the execution of the incorporation deed. For subsequent appointments, at the quotaholders' meeting.

# What do they do?

# Directors have the duty of managing the company and are responsible for it.

# In an Srl, one or more directors can request that the quotaholders' meeting resolve specific issues that are usually resolved by the management body (Article 2479, Italian Civil Code).

# Restrictions for directors?

# no nationality restrictions or requirements provided that the reciprocity condition is fulfilled (Article 16, preliminary provisions, Italian Civil Code).

# no proxy.

# at least one director should be an Italian resident (highly recommended)

# audio-video conferences if so provided by the company’s bylaws.

# Does an SRL need to have a controlling body (article 2477 Civil Code)?

Yes, if:

A. the company has a corporate capital equal to EUR 50 k.

B. consolidated financial statements.

C. controlling body appointed by the controlled company.

D. has gone beyond two of the economic requirements provided by Article 2435-bis for two consecutive years

# Quotaholders’ meeting (article 2479-bis Italian Civil Code)

# An ordinary quotaholders’ meeting shall be convened, at least, once a year for the approval of the yearly balance sheet

# quotaholders may be represented at the meetings by proxy

# written consent or written consultation method are also allowed

# Quotaholders’ meeting (article 2479 bis of Italian Civil Code)

# audio-video conferences means are allowed

# Quorum and majorities necessary to pass resolutions are stated by law, but may be differently regulated by the bylaws

#THANK YOU FOR LISTENING!!!

M.MIMUN@LEGALGROUNDS.EU