Can an Italian limited liability company really be incorporated with share capital of just 1 euro? Yes. Italian corporate law allows a limited liability company (S.r.l. – società a responsabilità limitata) to be incorporated with share capital starting at 1 euro. However, this does not mean that the company can also be incorporated or operated for just 1 euro.
The term “1-euro limited liability company” does not refer to a separate legal form. Both a limited liability company and a simplified limited liability company (S.r.l.s. – società a responsabilità limitata semplificata) can be incorporated with minimum share capital of 1 euro. The two forms differ, however, in their statutory requirements and, in particular, in the degree of flexibility available when defining the articles of association and the corporate structure. Accordingly, the classification of a 1-euro limited liability company depends not only on the amount of share capital but also on the chosen corporate form.
| Characteristic | Limited Liability Company | Simplified Limited Liability Company |
|---|---|---|
| Legal basis | Art. 2463 of the Italian Civil Code | Art. 2463-bis of the Italian Civil Code |
| Share capital | Starting at 1 euro | At least 1 euro and less than 10,000 euros |
| Shareholders | Natural persons and legal entities | Natural persons only |
| Capital under 10,000 euros | Must be paid in full in cash | Must be paid in full in cash |
| Contributions in kind | Generally permitted where share capital is at least 10,000 euros (e.g. properties, machinery etc.) | Not permitted |
| Deed of incorporation | Individually customizable | Standard form prescribed by law |
| Incorporation costs | Regular notarial and other incorporation costs | Generally lower; no notarial fees for the standard deed prescribed by law, although other costs may still be incurred |
The amount of 1 euro refers exclusively to the share capital and not to the costs of incorporating the company. Share capital represents the value of the contributions made by the shareholders. The funds paid in are generally available to the company for its business activities and must therefore be distinguished from fees and other incorporation costs.
Regardless of the amount of share capital, additional expenses arise when a company is incorporated, for example for registrations, professional advice and other formalities. Following incorporation, ongoing costs are also incurred for accounting, annual financial statements, tax returns and statutory filings. A low level of share capital does not generally result in simplified corporate or tax obligations. Depending on the nature of the business, further costs may arise for business premises, employees, insurance or external services.
A “1-euro limited liability company” is therefore a company with a very low statutory minimum capital threshold. However, the low amount of share capital provides no indication of the actual costs of incorporation or ongoing business operations.
A low amount of share capital reduces the capital required at the time of incorporation. Whether share capital of just 1 euro is appropriate, however, depends on the business model and the company’s financing requirements.
Share capital of just 1 euro provides only very limited financial resources for commencing business operations. A low capital base may make financing more difficult and affect relationships with banks, suppliers and other business partners. In the case of debt financing, additional collateral or personal guarantees may also be required.
An Italian limited liability company can be incorporated with share capital of 1 euro – but it does not cost just 1 euro. In addition to the actual incorporation costs, ongoing expenses arise for the administration and operation of the business. The statutory minimum amount of capital is therefore only one of several factors to be considered when incorporating a company. It is essential that the capital base is appropriate for the planned activities, financing requirements and the economic development of the company.
Share capital of just 1 euro does not, as a rule, provide a sufficient financial basis for the actual operation of a business. Although the legal framework allows a company to be incorporated with a very low capital contribution, such a capital structure is often of limited practical relevance, as it is generally insufficient to establish and develop an operating business. In addition, a very low capital base may make cooperation with business partners, banks or suppliers more difficult.