Types of business in Italy

2 years ago   •   .6 min read

.By İlayda Birol
.Table of contents

If you’re looking to open a business in Italy, there are several options to choose from. In this article, we’ll go over the main types of Italian companies and organisations.

Types of business
1. Limited liability company
2. Joint-stock company
3. Co-operative company
4. General partnership
5. Limited partnership
6. Simple limited partnership
7. Sole proprietorship
8. Private economic entity
9. Non-profit making organisation

Limited liability company (società a responsabilità limitata - s.r.l.)

A limited liability company (società a responsabilità limitata - s.r.l.) is a business entity that combines the characteristics of a partnership and those of a corporation. The company has no shareholders and therefore no stockholders: every member is liable for all the debts of the company up to his/her contribution in cash or assets for forming the company. As in other forms, directors’ liability is limited to their contributions; however, if you are part owner of an Italian LLC, your personal assets may be at risk if the LLC doesn't pay its bills on time or defaults on loans. While some states do not allow foreign ownership in corporate entities, there are usually no restrictions on foreign shareholders owning shares in an Italian LLC as long as they have been issued under UK law which allows them to register overseas companies with only one director resident in Italy (the remaining members can be either British or non-residents).

Joint-stock company (società per azioni - S.p.A.)

A joint-stock company is any company whose shares are registered with a public register, and whose shares are transferable. A limited liability company (società a responsabilità limitata - S.r.l.) is a particular type of joint-stock company that has the minimum number of shareholders required by law, which varies from one region to another. It may have no more than 50 or 100 owners. S.p.A., short for società per azioni ("shareholding company"), is a form of limited liability joint stock company used in Italy, France and several other countries.

Co-operative company (società cooperativa)

A co-operative company (società cooperativa) is a business entity that has been established by its members and whose aim is to provide goods or services. Unlike a private company, it doesn't aim to make profits for its shareholders; instead, it seeks to maximise the benefits of its members. To set up a co-operative in Italy, you first need to register with local authorities as an unincorporated association. From there on out, all decisions are made by your Board of Directors and/or General Assembly at meetings held every year. All this makes for quite an involved process! But don't worry: if you have enough people interested in working together under one name, then it's totally worth going through all these steps so long as they're willing participants too!

General partnership (società in nome collettivo - S.n.c.)

  • Members have limited liability, but they can agree to limit their liability.
  • Members are joint and several. Each member is liable for all of the debts of the company.
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Limited partnership (società in accomandita semplice)

A limited partnership is a business organization that is made up of two or more partners. The partners are liable for the debts of the business and share its profits. Each partner can contribute capital to the partnership and receive a share of profits. Limited partnerships must have at least one general partner who manages day-to-day operations, takes responsibility for debts, hires employees and oversees long-term strategy; all other partners are limited in their ability to participate in management decisions (but may be allowed to vote on certain matters).

Simple limited partnership (società in accomandita semplice - S.a.s.)

A simple limited partnership (società in accomandita semplice - S.a.s.) is a legal form of business organisation, which provides the limited liability protection of a corporation and the tax benefits of a partnership. In essence, it offers the best of both worlds: limited liability for its members and partnership style taxation. It's important to note that this type of entity must have at least 2 partners who share profits and losses equally (unless you establish something else in writing).

Personal business activity or sole proprietorship (impresa individuale)

The sole proprietorship is the simplest form of business organization. It requires a minimum investment and capital, but no formalities are required to register it. The minimum investment and capital is €10,000 for companies that deal in activities subject to VAT (Tax on Sales) and €5,000 for other business activities. The sole proprietorship does not require a company secretary or a company seal.

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Private economic entity (ente privato economico, EPE)

An EPE is a private company with no legal personality, which must have at least one shareholder and at least one director. It can be set up either by a civil law contract or by a private deed that is not subject to mandatory publication. EPEs must have a legal form (società per azioni/società semplice/società in accomandita semplice) unless they are set up as sole proprietorships or partnerships.

Non-profit making organisation / Association (associazione non riconosciuta / Enti di diritto privato senza fine di lucro)

  • Non-profit making organisation: is an entity that does not pursue its own interest, but that instead pursues the interest of third parties. Some entities are considered as public administrations by their status (e.g., municipalities), others are based on a private law foundation (e.g., foundations).
  • Private law foundation: is a legal subject whose legal capacity is organised through a charter and which carries out activities for its own benefit, but with no intention of generating profit. The aim of these entities cannot be to generate profit or revenue for their founder(s).

Other types of business organisations in Italy

There are a number of different business organizations in Italy that can be used to set up and run your business, such as:

Sole trader (imprenditore individuale) is the simplest type of organization structure. It involves one person who runs the company on his or her own without having to register it with the government.

Partnerships (società in nome collettivo) are created when two or more people start a business together but don't want to share profits equally. There must be at least two partners, who must each contribute an equal amount to start the firm and maintain ownership rights over its assets after it's registered as a legal entity.

Limited liability companies (società di capitali), also known as corporations or limited liability firms (société à responsabilité limitée), are similar to partnerships but offer additional benefits through limited liability protection for shareholders—who can only lose their original investment if they fail to pay their debts—and separate accounting requirements for tax purposes that make accounting easier than other corporate structures such as partnerships

The right type of business organisation can be a crucial factor in the success of your company. It's worth taking the time to get it right and finding out what kind of structure is best for you and your goals, as well as understanding all the legal requirements for running different types of business in Italy.


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