As we said some time ago, a foreign investor planning to start a business in Italy can:

• Set up a “sole proprietorship“;
• set up an Italian company;
• open a branch of a foreign company;
• open a representative office of a foreign company;
• acquire an existing business.

For more information regarding sole proprietorship, I invite you to read the previous article. Today I will try to shed some light on the second point, namely the establishment of a company.

In Italy there are three types of companies:

• Partnerships;
• Corporations;
• Cooperatives.

Partnerships

Characteristics

• Unlimited and joint liability

Partnerships do not have legal personality; therefore, their patrimonial autonomy is imperfect. This means that the partners are unlimitedly and jointly liable concerning the company’s obligations (subject to some exceptions provided for by the law): in practice, in the event of debts incurred by the company, the partner is liable and this liability extends to their personal present and future assets; furthermore, creditors may demand the fulfilment of an obligation from one or all of the partners, at their own discretion.

• Minimum capital not required

There is no minimum capital requirement for the establishment of a company that takes place through an authenticated private contract.

Categories

Partnerships can be classified into:

1. Simple partnerships (S.s., società semplice);
2. General partnerships (S.n.c., società in nome collettivo);
3. Limited partnership (S.a.s., società in accomandita semplice).

Simple partnerships can only carry out non-commercial economic activities, i.e., mainly agricultural activities. They inherit the aforementioned characteristics as regards the modalities of incorporation and the liability of the partners and are not subject to bankruptcy.

General partnerships differ from the previous ones by:

• the need to include the name of at least one of the partners within the company name and the reference to the status of S.n.c.;
• be subject to bankruptcy (which also affects all partners).

Limited partnerships are slightly more complex.
Partners are divided into two categories: general partners and limited partners.

The general partners administer and manage the company and are unlimitedly and jointly liable for the fulfilment of the company’s obligations; limited partners cannot administer or manage the company and are liable for the company’s obligations only up to the amount of the contributed capital. This means that their personal assets will not be affected in the event of default.

As for general partnerships, also in this case the company name must contain the name of one of the general partners and the wording S.a.s.

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