In the framework of the new provisions introduced by Law-Decree no. 1 dated January 24, 2012 on Urgent provisions concerning competition, the development of infrastructure and competitiveness, article 3 has introduced the figure of so-called Simplified limited liability companies (SSRLs) which, as explained in the accompanying report, should facilitate young people’s access to economic activity.
The Decree provides, in fact, that SSRLs may be incorporated upon an agreement or unilateral act being executed by natural persons who are not yet thirty five years of age on the date of incorporation.
This implies, first of all, that notaries public will not be involved in the drafting of the public deed as, instead, is requested by article 2463 for traditional limited liability companies.
For this reason, some of the amendments to the Law-Decree (which has to be converted into law) that have been proposed in Parliament propose that Notaries should check (without any fee being charged in relation thereto) the deed of incorporation.
In any event, such deed of incorporation must contain all of the indications contained in article 3, paragraph two of the aforementioned Law-Decree, and in particular: i) the personal details of each shareholder; ii) the company name containing the indication simplified limited liability company; iii) the registered office and other offices; iv) a share capital (of at least a Euro) which has been undersigned and fully paid up on the date of incorporation.
The most visible change is the provision of a minimum company capital of a Euro.
In traditional limited liability companies, a company capital of at least ten thousand Euros has, pursuant to article 2463, paragraph 2, no. 4) to be underwritten, of which twenty five per cent thereof has to be paid into a bank account, without prejudice to the provision contained in article 2464 c.c.
Even though the aforementioned provision is a considerable novelty for Italy, in other European countries there exist numerous examples of companies with very low capital thresholds such as, for example, German Unternehmergesellschaft (Ug), Belgian Société privée à responsabilité limitée/Starter (Sprl-S) and British Private Limited Companies (Ltd.).
In the light of the above, SSRLs’ very low capital threshold means that such capital must be paid in money and the company capital must be fully paid in.
Various amendments are, however, being discussed with a view to introducing the obligation to allocate a portion of annual profits to an increase in the company capital until a capital of ten thousand euros is reached (as is the case with German Ugs).
Other measures are foreseen, such as the registration of new companies in the Companies’ Registry (i.e. a declaration, which is exempt from stamp and secretariat duty, to the effect that the company is compliant with the law) and the amendment of the deed of incorporation by means of an agreement or unilateral act executed between the shareholders.
What happens when shareholders reach thirty five years of age?
The Law-Decree expressly provides that – in the event that the company is not converted into a traditional limited liability company – the shareholder is, by law, expelled from the shareholders’ role.
In the event that there is a sole shareholder or all of the shareholders no longer possess the requisites provided for under the law for SSRL shareholders, the company shall have to be transformed into a traditional limited liability company or be dissolved.
Anything not provided for under the above-described Law-Decree shall be governed by the provisions on traditional limited liability companies, insofar as they are compatible (the rules on the drafting and filing of simplified financial statements contained in article 14 of Law 183/2011 shall, for example, be applicable thereto).
By way of conclusion, it can be pointed out that SSRLs do not necessarily facilitate the making of investments by Venture Capitalists. The wording of the Law-Decree leaves no doubt as to the fact that SSRLs can only be constituted by natural persons who are under the age of thirty five.
We are of the opinion, therefore, that, in such case, it would be necessary to transform the SSRL into a traditional limited liability company (in relation to which all the obligations provided for under the law would have to be performed, including those on the minimum company capital).