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The Italian legislation provides the entrepreneur with various legal forms, which, according to their needs and priorities, they can select in order to develop their business model.

It should be noted, first of all, that all types of Italian companies share a commercial nature, that is, their aptitude for producing goods or providing services, with the exception of simple partnerships. The latter is, by definition, a form of company established to carry out non-commercial activities, as can be seen below.

Among the types of companies it is necessary to make a first distinction:

Partnerships, on the one hand, represent those entities where, from a legal point of view, people prevail over assets. The legal entity is identified in the person of the various partners, who take on both the rights and obligations deriving from the business activity.

In corporations, on the other hand, the equity element is central. The company itself represents the legal entity. In this case, the shareholders bear the charges and rights in a manner corresponding to their share of the capital.

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1.1       Società semplice

In this type of company there is no minimum share capital for incorporation. This corporate structure is mainly used in the agricultural sector in non-commercial activities.

The società semplici are not subject to bankruptcy discipline. In fact, these companies can only cease through dissolution, unanimously agreed by all shareholders. The termination of the company is preceded by the liquidation of the corporate assets, useful for extinguishing the suspended debts. The residual part of the assets is divided among the shareholders.

Like any partnership, the company’s creditors can demand the execution of the obligations with direct compensation on the assets of the individual shareholders.

In relation to the liability of the shareholders, it is specified that in società semplici – as well as in all partnerships – it is allowed to stipulate contracts having as their object the limitation of the liability of shareholders who are not also managers.

The law does not impose any limitations in relation to the management methods of the administration. This can be exercised jointly or separately by all the directors, or even only by a part of them.

The tax treatment of simple partnerships, as well as of all partnerships, is similar to that provided for individuals. The income produced is, in fact, divided among the shareholders in proportion to their respective company shares. Each shareholder is subject to personal income tax based on the rates that are applied progressively depending on the income produced.


1.2       Società in nome collettivo

The società in nome collettivo (SNC) maintains some characteristics similar to the società semplice. The main elements that differentiate these two types of companies reside in the commercial nature that characterizes the SNC and the greater attention that the law places on the statute of the company, through which it defines its essential elements, namely:

  • Identification of the partners;
  • Company’s name;
  • Indication of the shareholders to whom the administration is entrusted;
  • Registered office;
  • Company’s purpose;
  • Contributions from each shareholder;
  • Shares with which each shareholder participates in the company’s results;
  • Criteria for the distribution of profits and losses;
  • Duration of the company.

It seems appropriate to underline that, as in società semplici, in the SNCs there is no minimum share capital requirement. Likewise, the liability regime for social obligations is unlimited and common to all members. In such circumstances, creditors can claim against the personal assets of the shareholders only when the corporate assets are not large.

The same rules regarding the management methods and the limitation of the liability of non-executive shareholders of simple partnerships apply to the SNC.


1.3       Società in accomandita semplice

In the two forms of partnership described above there is only one category of shareholders. In the società in accomandita semplice (SAS) there are, instead, two types of shareholders:

  • the general partners (accomandanti), who are responsible for managing the company while maintaining an unlimited liability regime for corporate obligations;
  • and limited partners (accomandatari), who benefit from a limited liability regime, which prohibits their participation in the administration of the company. This prohibition is so strict that, if it is not respected, the shareholder can lose the benefit of the limitation of liability and, in its maximum consequence, be excluded from the company.

It is noted here that the appointment and revocation of the managers follows a particular path. This procedure requires the unanimous approval of the general partners, in addition to most of the limited partners. Furthermore, the latter have the right to ask the managers to be dismissed for just cause, similarly to the right that shareholders have in the corporations.

The differentiation between general partners and limited partners is the characterizing element of this type of company which, for the rest, maintains a rather simple discipline, like all partnerships. In fact, it adopts the legislation applicable to the SNCs, suitably adapted to the coexistence of two categories of members.

The same rules apply to the SASs regarding the management methods and the limitation of the liability of non-administrator shareholders of simple partnerships.



2.1       Società a responsabilità limitata

This is the most common type of company in Italy. In this category, in fact, the advantages of corporations are collected – from the limitation of shareholders’ liability to their contributions – while maintaining a flexible structure, without the organizational constraints envisaged for società per azioni.

Being a capital company, the establishment of the SRL always takes place in written form with a public deed in the presence of a notary. The minimum capital for the constitution is 10.000,00 euros. Of this value, at least 25% of the cash contributions must be paid at the time of incorporation, in addition to the total contributions in kind.

There is, starting from 2013, the possibility of setting up a simplified version of the SRL, i.e. the SRLS. (società a responsabilità limitata semplificata) with a share capital of less than € 10.000,00, up to a minimum of € 1,00. In this case, contributions in kind are not allowed and any contributions must be paid at the time of incorporation. The SRLSs require the allocation of at least 25% of the annual profit to a capital reserve, up to the value of 10.000,00 euros.

The law allows the incorporation of SRL unipersonale, i.e. with a single partner. In this case, however, the capital injections must be fully paid up at the time of incorporation.

As already mentioned, the SRLs are a very flexible business form and can be adapted to all kinds of organizational needs. In fact, non-shareholder subjects are allowed to take over the administration of the company, and this administration can take place in a collegial manner (board of directors) or in a unipersonal manner (sole director). These offices are approved by the shareholders’ meeting and the articles of association may also provide for limitations on the power of the directors.

In addition to an administrative body, in the SRLs may be required to establish a supervisory body if at least one of the following circumstances occurs:

  • The company draws up the consolidated financial statements;
  • The company controls a company that is obliged to audit accounts;
  • The company has exceeded, for two consecutive years, the following values:
    • Total shareholders’ equity: € 4,000,000.00;
    • Total sales revenues: € 4,000,000.00;
    • Average number of employees: 20 units.

If the circumstances provide for the establishment of the control body and the bylaws do not require alternative solutions, this body carries out a management control and statutory audit activity.

Capital companies are considered, for tax purposes, to be autonomous taxable persons, and the income produced by them applies:

  • IRES: corporate income tax at a fixed rate (24%) to be applied on the tax base consisting of the pre-tax result net of deductions;
  • IRAP: is a regional tax on productive activities at variable rates based on the region in which these activities are carried out, which is applied to the difference between revenues and production costs (value of production).

Dividends are taxed on shareholders as capital gains as follows:

Subjects Dividends taxation
Individuals Withholding tax at a flat rate of 26%
Partnerships Ordinary IRPEF tax rates on a taxable basis of 58.14%
Corporations IRES tax with a tax base of 5%



2.2       Società per azioni

This is the most structured type of company that Italian law has conceived. The società per azioni, or even SPAs, are established by public deed, in the presence of a notary. The deed of incorporation must indicate the place where the domicile of the company is located, its name, the object of the activity and the indication of the first directors appointed.

In SPAs, a minimum share capital of € 50.000,00 is required. The shares into which this capital is divided can have different categories and effects: with higher or lower voting rights, higher or lower returns…

In general, capital contributions must involve monetary resources. The statute may, however, allow for contributions in kind. The law prohibits, in any case, that the contributions take place through work and services. The liability of the shareholders is also in this case limited to the contributions paid.

As mentioned, SPAs are highly structured companies, since different bodies coexist within them:

  • The shareholders’ meeting (which can be ordinary or extraordinary), which, among the various functions, appoints and dismisses the directors and members of the control body and approves the financial statements presented by the board of directors;
  • The administration, which can be structured individually, with sole director, or collectively, by establishing a board of directors, within which one or more managing directors with specific duties can be appointed. The competence of the administrative body is general, being therefore authorized to carry out any action necessary for the pursuit of the corporate purpose;
  • The control body, the board of statutory auditors, which has the task of supervising the correct management of the directors. The activity carried out by this body focuses on the legitimacy of the acts carried out by the Board of Directors, since, not being authorized to carry out management activities, it cannot enter into the merits of the resolutions. In addition, this body, if the SPA is not listed, may include in its powers the supervisory activity on company accounting which, otherwise, is entrusted to a statutory auditor.

It should be noted that, with the 2004 reform, two alternative systems to the one just described were allowed: the dualistic and the monistic system. In the first case, the control body is appointed by the shareholders’ meeting, which in turn appoints the administrative body. In the second, the administrative body is appointed by the shareholders’ meeting and welcomes within it a committee that exercises the powers of the control body. In both cases, the appointment of an auditor is required.

The taxation criteria depend on two fundamental factors: the shareholding percentage held by the shareholder and the location of the company that pays the dividends.

First, a distinction must be made between qualifying and non-qualified holdings: a qualified holding determines a share of capital with a specific weight. In unlisted companies, this threshold is identified in equity investments exceeding 20% ​​of voting rights and 25% profit-sharing. In listed companies, where the concentration of shares is diluted, this threshold is reduced to 2% of voting rights and 5% of profit-sharing rights.

The location of the company paying the dividends is decisive as follows.

In companies located in Italy, the following taxation rules are applied:

Subject Dividends taxation
Qualified holding  Individuals Ordinary IRPEF rates on a taxable basis of 49.72%
Corporations IRES tax with a tax base of 5%
Individual shareholder Withholding tax at a flat rate of 26%
Non-qualified holding Partnerships Ordinary IRPEF rates on a taxable basis of 49.72%
Corporations IRES tax with a tax base of 5%, will have a total exemption if the company in question has opted for the transparency regime (IRPEF taxation directly by the shareholders)


The Financial Administration penalize dividends paid to residents by companies that produce profits in countries with privileged taxation. Specifically, the dividends paid by these companies contribute to the IRPEF or IRES taxable base to the extent of 100% of their amount.


2.3       Società in accomandita per azioni

This type of company is quite similar to SAS, where it is distinguished between general partners and limited partners, with the same implications for the administration of the company and the liability regime for both categories. However, the equity investment consists of shares and the rules applied are of the SPAs.


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