General Overview

Italy has a civil law legal system.

There are basically two forms of company with limited liability, i.e. “Società per Azioni” (S.p.A.) – Joint-Share Company (Incorporation) – and “Società a responsabilità limitata” (S.r.l.) – Limited Liability Company.

In the cases of a S.p.A. and a S.r.l., the Company is only answerable with its assets for the obligations of the Company. The liability of the Stockholders is limited to the amount of the participation subscribed by each of them.

In comparison with a S.p.A., a S.r.l. allows more flexibility and autonomy for its  members. In fact, the members may regulate many features (e.g. the governance system) with great flexibility in the Articles of Association (By-laws).

A third form of corporation, which has not attained much success in business practice, is the “Società in accomandita per azioni” (S.a.p.a.) – Limited Partnership by Shares. It has some of the characteristics of both a Limited Partnership and a Joint‑Stock Company. Like the former, there is a distinction between jointly and severally liable partners and limited partners who are liable within the limits of the portion of equity respectively subscribed. Apart from the differences connected with such distinction, the S.a.p.a. is similar to the S.p.A.

Capital Stock

The minimum capital of an S.p.A. is euro 50,000.

The minimum capital of an S.r.l. is euro 10,000.

At least 25% of the capital subscribed in cash must be paid in at the moment the company is formed. In the case of a Company founded by a single stockholder, 100% of the capital must be paid in at that time.

In an S.p.A., shares represent the participation of the Shareholders.

In an S.r.l., the participations are not represented by shares but rather by portions (quotas) which cannot be incorporated in certificates.

For contributions in kind, the value of the contribution must be determined on the basis of an appraisal made by an independent expert appointed by the local court. In the case of an S.r.l., the Stockholders may appoint the expert for the appraisal.

Starting from 2012, a new form of corposation has been introduced. It is the “Società a responsabilità limitata semplificata” (S.r.l.s.) – Simplified Limited Liability Company. It can be set up with a starting capital of 1 to 9.999 euro. Compared to the standard S.r.l., the simplified form has some restrictions concerning the company’s structure and functioning.


A public Instrument of Incorporation, attested by a Notary Public, is necessary to set up both an S.p.A. and an S.r.l.

The Instrument of Incorporation consists of two parts: the first (Memorandum of Association) records the intent to incorporate the Company and some essential information in respect thereof; the second comprises the Articles of Association (By‑laws) and indicates the rules concerning the operation, the organisation and the winding-up of the Company.


The minimum number of Stockholders is one. There are no limitations on maximum number, residence or nationality. However, there may be some exception to the latter (see Foreign Investors).


An S.p.A. may adopt three models of governance.

The “ordinary” system is based on the Shareholders’ meeting, which appoints the administrative body (Board of Directors or Sole Director), the supervisory body (board of statutory auditors) and the registered auditor.

The other two models are the “dual” system and the “single” system. They have not attained much success in business practice and are not examined in this Guide.

In an S.r.l., the members define in the Articles of Association (By-laws) how the company is managed and controlled/supervised.


The management of the Company may be entrusted to a Sole Director or a Board of Directors.

Directors do not need to be Stockholders (in the case of an S.r.l., this must be stated in the By-laws) and there are no restrictions regarding their number, nationality or place of residence. However, the appointment of non-EU (European Union) nationals as Directors is subject to certain restrictions. In particular, non-EU nationals may be appointed as Directors of Italian entities based on reciprocity (i.e., the country of citizenship of the Foreign Director must allow the same benefit to Italian citizens).

The Board of Directors must elect a Chairman, unless he has been appointed by a Stockholders’ resolution, and may elect one or more Managing Directors from among its members.

The Directors’ remuneration is determined by the articles of incorporation or by the Stockholders’ meeting. The Board of Directors may decide on special remuneration for Directors with special responsibilities.

Statutory Auditors and Registered Auditors

All S.p.A. must have a so-called “Board of Statutory Auditors” (“Collegio sindacale”).

Members of the Board are entrusted with supervising the following areas:
- compliance with the law and the By-laws of the company;
- correct administration and internal controls;
- adequacy and reliability of the organisational and administrative structure;
- adequacy and reliability of the accounting system.

The Board of Statutory Auditors is comprised of three or five permanent members and two auxiliary members, at least one of whom must be listed on the Roll of Auditors at the Ministry of Justice.The Board of Statutory Auditors is appointed by the Stockholders for a period of three years. It cannot be dismissed except for just cause and with the approval of the local court.

The Stockholders, in conformity with a fee schedule established by a specific Ministerial Decree, determine the remuneration of the Statutory Auditors.

When the appointment of the Board of Statutory Auditors is mandatory, the appointment of a Registered Auditor or an Audit Firm registered within the Roll of Auditors at the Minister of Justice is also compulsory.

Among other tasks, the Registered Auditor (or the Audit Firm) must perform a quarterly audit. In addition, he must prepare a report on the financial statements that includes an assessment on accounting, the reliability of the financial statements and the results of the audit performed during the financial year. This report must then be submitted to the annual general meeting.

In a S.p.A., the company’s By-laws may entrust the audit to the Board of Statutory Auditors when the company does not have to draw up consolidated financial statements.

When the Board of Statutory Auditors is entrusted with the audit of the company, all its members must be registered auditors.

Also the remuneration of the Registered Auditors is established by the Stockholders.

With regards to the Italian limited liability companies (S.r.l. and S.r.l.s.), the incorporation deed may stipulate the appointment of a controlling body or a Registered Auditor. The controlling body will consist of a single Statutory Auditor or a board of three Statutory Auditors.

The appointment of a controlling body or a Registered Auditor is mandatory when one or more of the following conditions are met:
1. for two subsequent financial years, the company has passed two of the following three limits:
a) total assets in the balance sheet: euro 4,400,000;
b) earnings from sales and provisions of services: euro 8,800,000;
c) staff employed as an average during the financial year: 50 units;
2. the company have to draw up consolidated financial statements;
3. the company controls another company that is subject to the accounting audit.