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Setting up a company
Opening and starting a company is a step to take with correct information and safeguards. To be on the safe side, the support of a notary's firm is absolutely necessary; Get in touch with us!
What needs to be done to form a company?
Parties wishing to start a company must enter a contract: the company contract (the so-called deed of incorporation), by which two or more persons contribute goods or services for the joint exercise of an economic activity for the purpose of dividing its profits. However, it is allowed under the legal system that the incorporation of a company can also be done by a single person by a unilateral act: for example, single-member joint-stock or limited liability company and incorporation of a new company as a result of a demerger, upon a resolution of the shareholders' meeting of the demerged company. In cases where the social contract results not from a document, but from the conduct of the partners, there will be a so-called de facto company: however, the absence of a formal document gives rise to difficulties, because nothing proves the existence of the company. However, the existence of a de facto corporation is not allowed.
What capacity is required to be able to sign a partnership agreement?
Individuals interested in becoming partners, whether they are individuals, corporations, associations, or, in general, entities, must be capable of acting, that is, of putting in place valid legal acts.
But can limited companies be partners in a partnership company?
This question was controversial until recently, but the legislation in force since January 1st, 2004, has resolved the issue affirmatively. The participation of other entities in the companies may also result in different solutions depending on the participating entity and the type of subsidiary company. Broadly speaking, any natural person who is eighteen years of age or older and a citizen of Italy or another EU country, may start a company. The participation of minors, including emancipated, incapacitated and disqualified persons, while generally possible, is subject to special authorizations. Particular prudence should also be shown where a person has been appointed a support administrator. In such case, precise reference will have to be made to the provisions of the decree appointing the administrator. The variety and multiplicity of situations that may thus arise depending on the type of company to set up, the circumstances that determine its incorporation -for example, the joint heirship of a company - and the nature and quality of the persons who intend to proceed with its incorporation, advise you to consult your trusted notary on a case-by-case basis to pinpoint the right course of action in the specific case. The participation of foreigners, non EU citizens, is allowed, within the limits provided for by the law. Again, it is highly advisable to consult your trusted notary on this matter.
Essential requirements for the partnership agreement
- contributions;;
- joint exercise of economic activity;;
- profit sharing..
Contributions
Company assets and share capital
Contributions are the services that the partners undertake to provide under the partnership agreement. In essence, contributions constitute the contributions of members to the formation of the initial assets of the company. Their function is to provide the company with the initial capital to carry out its business activities. By means of contributions, each member allocates, for the duration of the company, part of their personal wealth to the common activity and exposes themself to business risk: precisely, the member runs the risk of receiving no compensation for the contribution made if the company does not make a profit, and runs the additional risk of losing, in whole or in part, the value of the contribution, if the company posts losses. The following entities may be the object of contribution: money, goods in kind (movable and immovable, tangible or intangible assets) whose ownership or right to use is transferred to the company, services, whether manual or intellectual, credits, companies. In short, any entity subject to economic valuation that the parties deem useful or necessary for the conduct of the common business activity, can constitute the object of contribution.
However, limits are established with regard to corporations and cooperative societies: the provision of labour or services, in particular, are directly assignable only in the limited liability company.
It is also appropriate to illustrate the notions of corporate assets and share capital, as they are related to the concept of contributions.
Corporate assets
The corporate assets are all legal relationships, assets and liabilities, pertaining to the company. It initially consists of all contributions made or promised by the members. During the life of the company, the company's assets undergo continuous changes in relation to the company's economic activity. Its size (assets and liabilities) is ascertained periodically through the annual preparation of financial statements. Equity is defined as the positive difference between assets and liabilities. In addition, the company's assets serve the function of a general guarantee for the company's creditors.
Share capital
Share capital is a numerical entity that expresses the cash value of contributions, as per valuation made in the company's articles of incorporation. Share capital 100 means that the members are under obligation to make (subscribed capital) and/or have made (paid-up capital) cash contributions or other entities that, at the time of entering into the partnership agreement, had such monetary value. The share capital remains unchanged during the life of the company until, by amendment of the articles of incorporation, it is decided to increase or reduce it.
The joint exercise of economic activity
The corporate object Those who form a company are driven by the purpose (the so-called intent purpose) of exercising, jointly with other entities, a certain type of economic activity. This activity constitutes the corporate object and must be specified in the articles of incorporation. It can be changed during the life of the company only by means of compliance with the rules governing changes in the articles of incorporation. It must be a productive activity, that is, an activity having patrimonial content, conducted with an economic method and aimed at the production or exchange of goods or services, while it cannot be limited to the mere enjoyment and management of goods because, otherwise, we will deal with a communion and not a company (with the exception of management companies). It is also essential, in order to have a company, that the productive activity be carried out jointly.
Profit sharing
The joint exercise of an economic activity in the form of a company is aimed at making a profit (objective profit) to be subsequently divided among the partners (subjective profit). This is the so-called profit-making purpose or profit. Companies that pursue this purpose are called profit-making corporations (partnerships and limited companies). There are, however, other types of companies (cooperative companies) that by law must pursue a purpose other than profit, namely, a mutualistic purpose. Their typical purpose is to provide members with a direct financial benefit, which may consist, depending on the cooperative's field of activity, in cost savings or higher remuneration for the work performed by members in the cooperative.