[ESTABLISHING A BUSINESS ENTITY IN ITALY] 273
An S.r.l. does not require a board of statutory auditors unless certain conditions are met, such as exceeding specific thresholds in assets, revenues, or employees. In such
cases, the company must appoint a board of statutory auditors or a single auditor, as governed by Article 2477 of the Italian Civil Code.
3.1.2.1 S.p.A.’s and S.r.l.’s Pros and Cons.
SPAs
SRLs
PROS
• Limited liability : Shareholders have limited liability, meaning they are responsible for the company's debts and obligations only up to the amount of their capital contributions. • Access to capital markets : SPAs can issue shares that can be publicly traded if the company is listed on a stock exchange, offering greater access to capital markets and funding opportunities. • Prestige and credibility : SPAs are often considered more prestigious and credible due to their complex management structure and stricter reporting requirements, which can help attract investors and partners. • Transferability of shares : Shares in an S.p.A can be easily transferred, facilitating changes in ownership and attracting potential investors. • Clear corporate governance : The corporate governance structure of an S.p.A is well-defined and regulated by the Italian Civil Code, providing clarity and stability for shareholders and management. The management structure of an S.p.A, including the board of directors and the board of statutory auditors, can be more complex and formal compared to an S.r.l. • Complex management structure : • Higher costs : SPAs have a higher minimum share capital requirement (€50,000), and their more complex management and reporting requirements can lead to higher operational costs. • Stricter reporting requirements : SPAs must maintain more extensive accounting records and submit additional reports and disclosures to the relevant authorities, which can be time- consuming and resource intensive. • More extensive regulation : SPAs are subject to a greater degree of regulation and oversight by
• Limited liability : Shareholders have limited liability, meaning they are responsible for the company's debts and obligations only up to the amount of their capital contributions. • Flexible management structure : SRLs offer a more flexible management structure compared to SPAs, with fewer formal requirements, making them more suitable for small and medium-sized businesses. • Lower costs : SRLs have a lower minimum share capital requirement (€1) and generally lower operational costs due to their simpler management structure and reporting requirements. • Simplified reporting requirements : SRLs have less stringent reporting requirements compared to SPAs, reducing the administrative burden for the company. • Greater shareholder control : In an S.r.l., shareholders can have a more direct influence on the management and decision-making process, allowing for more control over the company's operations. • Limited access to capital markets : SRLs cannot issue publicly traded shares, which may limit their access to capital markets and funding opportunities. • Less transferability of ownership : Ownership interests in an S.r.l. (quotas) can be less easily transferred compared to shares in an S.p.A, which may be a disadvantage for attracting potential investors. • Lower prestige and credibility : SRLs may be perceived as less prestigious and credible compared to SPAs, which could impact the company's ability to attract investors and partners. • Limited scalability : The simpler management structure and lower capitalization of an S.r.l. may
CONS
ILN Corporate Group – Establishing a Business Entity Series
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