In simplified LLCs, the share capital can also be as little as 1 euro
Simplified LLCs can also be formed online
LLC: what is it?
To make it more accessible to new entrepreneurs (including foreigners), from the point of view of costs and bureaucracy, to establish a company, since 2012, the category of Srls, i.e., Simplified Limited Liability Companies, has been introduced in our legal system.
This type of Srl is very much in use for those who intend to invest in, for example, catering, hospitality (think of a b&b), or other numerous business activities.
Why simplified
“Simplified” means that the company enjoys lower initial costs, however, compared to the LLC:
- the partners can only be natural persons
- the articles of incorporation and bylaws cannot be amended
- the minimum share capital is 1 euro, while the maximum capital cannot exceed 9,999 euros
- the capital must be fully paid in cash, and no goods and/or services can be contributed.
Requirements
Memorandum of incorporation
A standard ministerial model of articles of incorporation and bylaws must be used in the incorporation of an LLC.
According to Article 2463 bis, which dictates its regulation, the Srls, whose administration can also be entrusted to “non-members,” can be established by contract or unilateral deed by natural persons, and the deed of incorporation must be drawn up by public deed.
The deed must state:
- The last name, first name, date, place of birth, domicile, and citizenship of each member
- the company name containing the indication of simplified limited liability company and the municipality where the registered office of the company and any branch offices are located
- the amount of the share capital, equal to at least 1 euro and less than the amount of 10,000 euros, subscribed and fully paid at the date of incorporation. The contribution must be made in cash and paid to the administrative body
- the activity that constitutes the object of the company the shareholding of each shareholder, the rules relating to the operation of the company, indicating those concerning administration, representation, the persons entrusted with the administration and the person in charge of the statutory audit, if any place and date of signing directors.
Once the company is incorporated, it is necessary to register the Srls in the Register of Companies within ten days of incorporation and apply for a tax code or VAT number and Ateco code.
Subjective requirements
With no age limit, any natural person (the legal person is excluded) can establish a simplified Srls. However, the transfer of shares of simplified LLCs to a person other than a natural person is allowed after the act of incorporation, as the prohibition is limited to the incorporation phase. However, it should be specified that the company loses the status of a simplified LLC due to the entry of legal persons into the share capital.
Contributions and Share Capital
In Srls, the maximum share capital must be €9,999.99.
Beyond this threshold, in case of capital increases, it is necessary to convert the company into a normal Srl by notarial deed. As specified by the standard form of articles of incorporation, the shareholders must indicate the share in the capital subscribed by each shareholder and the percentage of participation.
As for contributions, these must be made in cash and must be paid to the administrative body. Therefore, contributions to work and services are not possible.
Facilities
The articles of incorporation and registration in the Commercial Register are exempt from the stamp and secretarial fees. In addition, no notary fees are due, and 1 euro is sufficient as share capital.
The benefits apply only to companies whose members are natural persons, regardless of age.
Generally speaking, it may be convenient to establish an Srls in case the activity you decide to undertake provides or needs little initial investment.
Online incorporation
Simplified LLCs can also be incorporated online. However, when incorporated online, the notary fee is paid by half.
