Incorporation in Italy of a Limited Liability Company

Under the Italian Law there are two main forms of limited liability companies: (1) Società a Responsabilità Limitata – S.r.l., in English limited liability company; and (2) S.p.A. – Società per Azioni, in English joint stock company. Both S.p.A. and S.r.l. are limited liability companies, but only in the first one the share capital is divided into shares, transferable by way of endorsement, while in the S.r.l. the capital is divided into “quotas”, which are not embodied in any negotiable instrument, but are only recorded in the quotaholders’ book. Quotas are also transferable by means of appropriate instruments (contracts, wills) and the transfer deed is registered in the quotaholders’ book as well as in the relevant Register of Companies. The structure of an S.p.A. is more complex with respect to that of an S.r.l. and the costs for its set-up and maintenance are significantly higher. A form of an S.p.A. is required for listed companies or is usually chosen for large companies with many shareholders or for special corporate governance purposes. Vice versa, the S.r.l. has a more flexible structure, much space is afforded to the will of the shareholders and the costs for its set-up and maintenance are lower. Based on the above differences between S.p.A. and S.r.l., and in consideration of the ability to convert at any time the S.r.l. to an S.p.A. (and vice versa), the S.r.l. would seem the most advisable legal entity to be incorporated as a basic kind of Italian company enjoying limited liability, and, in particular, in case of a start-up operation, save for peculiar provisions of law that forbid to carry out a peculiar activity to companies which are not incorporated as S.p.A.