The Differences Between S.P.A. And S.R.L. In Italy:

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A 2020 Guide All the differences between S.P.A. and S.R.L. in Italy: which one to choose?

What is an S.P.A.? An S.R.L.?

​The Limited Liability Company (società a responsabilità limitata or S.R.L) and the Joint-Stock Company (società per azioni or S.p.A.) are the two most common types of companies in Italy with a limited liability.

Let’s start off, briefly, with what these companies actually are. With an S.R.L., liability is limited to the amount of capital that will be paid into the company. This is the most common type of company in Italy, even more so than an S.p.A. They can be incorporated with a group of people or by a single person called a “sole member” or “sole director.” If a sole director created the S.R.L. then they will need to deposit the entire amount of share capital.

With respect to the above paragraph, the liability of members of an S.p.A. is slightly different: it is limited to the amount of capital issued through shares. In short, this is a stock company in the sense that it offers shares publicly to the market or privately to its founders. It is a kind of limited partnership. There are three accepted governance systems, but an S.p.A. is ordinarily governed by a Board of Directors (or sole director), the board of statutory auditors, and the registered auditor, all of who are appointed through shareholders meetings.

What are the differences between an S.p.A. and an S.R.L.?

​There are a number of similarities between the S.p.A. and the S.R.L. For example, both are incorporated through a public deed (the deed of incorporation) drafted by a notary public and must subsequently be registered with the Chamber of Commerce, but it is easier to identify their main differences in order to choose which one to use, and there are three:

1. With an S.p.A. capital is represented by shares, which in Italy are nominal, that can be transferred. In an S.R.L. capital is represented by quotas which are not represented by an endorsable instrument;

1. An S.p.A. requires a minimum of €50,000.00 while it is only €10,000.00 for a S.R.L. and at least 25% of the capital must be paid at the time of incorporation;

1. Under Italian law, An S.p.A. must have a committee of auditors, while an S.R.L. does not need aboard of statutory auditors except in specific cases under art. 2477 of the Italian civil code. The auditors are responsible for preparing a quarterly report on the financial statements that: assess the accounting, ensure reliability of the financial statements and check the results of the audit performed during the financial year.

In both limited liability companies and joint-stock companies, where the company has more than one participant, liability is limited to the company’s assets. The participants are not personally liable except in the case that they have used the company for their own purposes, thus committing fraud.

There are some other differences that may be worth noting, but are less consequential:

1. With an S.R.L.,management of the companyis easier which explains why it is the dominant choice when incorporating an Italian company. This also makes the accounting more straightforward;

1. Regarding specific business activities, if you intend to be involved in any kind of banking or auxiliary financial, insurance or investment activities then, by law, you are required to operate as an S.p.A. which may require additional licences.

Just a quick note about having a registered office. They can carry out promotional and advertising activities, receive and/or provide information on the parent company’s behalf, do scientific research, create relationships with possible clients and monitor the Italian market. They cannot carry out any actual business activities themselves regarding transactions.