[ESTABLISHING A BUSINESS ENTITY IN ITALY] 259
ESTABLISHING A BUSINESS ENTITY IN ITALY 1. Types of Business Entities Italian law provides multiple forms of organizational structures to do business in Italy. They differ from one another due to the extent of liability undertaken by its members. In particular, certain business organizational forms do not limit the liability of its members (among which the “ società semplice ” and the “ società in nome collettivo ” that operate similar to a partnership) or which provide for limitations to the personal liability only for certain classes of stakeholders (i.e. the “ società in accomandita semplice ” and “ società in accomandita per azioni ”), as opposed to others which limit their personal liability (such as the S ocietà a responsabilità limitata ” – similar to the Limited Liability Company or the “ Società per azioni ” similar to the Joint Stock Company). Italy's legal framework offers a variety of business entities to suit the diverse needs of foreign investors. Governed by the Italian Civil Code, these entities are designed to provide flexibility and adaptability, while ensuring adherence to relevant rules and regulations. A brief overview of the main types of business entities in Italy is provided below: 1. Sole Proprietorship ( Impresa Individuale ): This is the simplest form of business entity, where a single individual owns and manages the business. The owner is personally responsible for all debts and liabilities and is subject to personal income tax. 2. General Partnership ( Società in Nome Collettivo, Snc ): An Snc is an unincorporated business entity formed by two or more partners, who share unlimited personal liability for the company's debts and obligations. Profits and losses are divided among partners according to their partnership agreement.
3. Limited Partnership in Accomandita Semplice, Sas ): Similar to a general partnership, a Sas has two types of partners: general partners with unlimited liability and limited partners with liability restricted to their capital contributions. Limited partners are not involved in the management of the company. ( Società 4. Limited Liability Company ( Società a Responsabilità Limitata, S.r.l. ): A S.r.l. is a popular choice for small and medium-sized businesses. It is made up of one or more shareholders whose liability is limited to their capital contributions. S.r.l. have a flexible management structure and are subject to corporate income tax. 5. Joint Stock Company ( Società per Azioni, S.p.A. ): A S.p.A. is suitable for larger businesses and is characterized by a more complex management structure. Shareholders' liability is limited to their capital contributions, and shares can be publicly traded. S.p.A.s are subject to corporate income tax and have more stringent reporting and disclosure requirements. Understanding the various business entities available under the Italian Civil Code and their respective rules and regulations is essential for foreign investors seeking to establish a presence in the Italian market. Selecting the most suitable legal entity ca significantly impact the success and growth potential of a business venture in Italy. 1. Sole Proprietorship ( Impresa individuale ) A sole proprietorship, or Impresa Individuale or Ditta Individuale , is the simplest form of business entity in Italy, designed for individuals who wish to operate a business on their own. In this structure, the owner has full control over
ILN Corporate Group – Establishing a Business Entity Series
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