The Società a responsabilità limitata (Srl) is the Italian form of a limited (liability) company and, due to its clear liability limits and flexible organisational structure, is considered the most common type of corporation in Italy, especially for small and medium-sized enterprises (SMEs). It is a legal entity with complete financial autonomy (autonomia patrimoniale perfetta) and is the functional equivalent of the German GmbH.
The central feature of the GmbH is the limited liability of the shareholders (soci) to the amount of their capital contribution. Only the company's assets are liable for the company's liabilities, which protects the private assets of the shareholders.
The minimum share capital for a "normal" GmbH (s.r.l. ordinaria) is €10,000.
However, it is possible to establish a GmbH with a capital of at least €1. In this case, special requirements apply.
The shareholders' shareholdings, equity participations are represented by quotas (quote). The shares are generally freely transferable. However, the articles of association may provide for pre-emptive rights, approval requirements or transfer restrictions.
The formation of a limited liability company requires the involvement of an Italian notary (notaio). The company is only established once the deed of incorporation (atto costitutivo) has been entered in the Register of Companies (Registro delle Imprese).
Management is the responsibility of the administrator(s) (amministratori), the equivalent of a German managing director. The administration can be organised very flexibly:
Administrators are personally and jointly and severally liable to the company, the shareholders and third parties for damages resulting from intentional or negligent breaches of duty.
The decision-making process in a limited liability company is flexible.
Regardless of the form chosen, shareholders must decide on the following matters:
Unless otherwise specified in the memorandum of association, the voting rights of the shareholders are calculated in proportion to their shareholding in the share capital.
A control organ (collegio sindacale) or an auditor (revisore) is generally not mandatory for a limited liability company. The obligation to appoint one arises from Art. 2477 of the Codice Civile.
The control organ is responsible for monitoring compliance with the law and the articles of association, as well as the principles of proper administration and the suitability of the administrative and accounting systems.
The limited liability company is obliged to keep double-entry bookkeeping (contabilità ordinaria) and must keep the books required by law.
The annual financial statements (bilancio d'esercizio) are prepared by the administrators and must generally be submitted to the shareholders' meeting for approval no later than 120 days after the end of the financial year (180 days under certain conditions). The annual financial statements must be filed with the Commercial Register within 30 days of approval.
The limited liability company is a corporation and as such is taxable. Further details on IRES can be found in our encyclopaedia entry "The corporate income tax IRES".
Taxes (company level):
Profit distribution (dividends):
Dividends distributed to shareholders (natural persons) are generally subject to a withholding tax of 26% (final taxation).
1. Who can establish a limited liability company (GmbH) in Italy?
A limited liability company can be established by one or more parties (shareholders) by means of a contract. Shareholders can be both natural persons and legal entities.
2. What is the minimum capital requirement for a limited liability company?
The minimum capital requirement for a standard limited liability company is €10,000.
3. Who is liable for the debts of an Italian limited liability company?
In principle, only the company itself is liable with its assets. The shareholders are only liable up to the amount of their capital contribution.
4. How is taxation carried out?
Taxation is based on the separation principle: taxation at company level (IRES 24%, IRAP approx. 3.9%) and separate taxation on distributions.
5. Does a limited liability company have to appoint a controlling body or an auditor?
The appointment of a controlling body (such as an auditor or supervisory board) is mandatory if certain thresholds are exceeded in two consecutive financial years or if the company is required to prepare a consolidated annual financial statement.
6. Is the filing of annual financial statements mandatory?
Yes. Failure to file may result in sanctions and liability consequences.