Italy offers a range of legal structures for entrepreneurs seeking to start or expand their businesses. Whether you're launching a small family-run company or building a scalable enterprise, selecting the right legal form is essential for operations, taxation, liability, and governance.

Let’s explore the two main categories of Italian business entities—Partnerships (Società di Persone) and Corporations (Società di Capitali)—highlighting key characteristics, legal requirements, and tax implications.

Partnerships (Società di Persone): People First

In partnerships, the identity of the individual partners plays a central role. These are generally simpler and more flexible, often used by small businesses and professionals.

1. Società Semplice (Simple Partnership)

• Best for: Non-commercial activities (e.g., agriculture)
• Capital: No minimum capital required
• Liability: Partners are personally and jointly liable
• Taxation: Income taxed personally based on individual tax rates
• Management: Joint or separate; flexible internal rules

Note: Not suitable for commercial enterprises and not subject to bankruptcy procedures.

2. Società in Nome Collettivo (General Partnership - SNC)

• Best for: Small to medium commercial businesses
• Capital: No minimum required
• Liability: Unlimited joint liability among partners
• Governance: Founding document must detail company purpose, contributions, administration, and profit-sharing

3. Società in Accomandita Semplice (Limited Partnership - SAS)

• Best for: Businesses needing external investors or silent partners
• Structure: Two partner types:
  • General partners (accomandatari): Manage business, unlimited liability
  • Limited partners (accomandanti): No managerial power, limited liability
• Governance: Key decisions require agreement from both partner types

Advantage: Balances investor protection with operational control.

Corporations (Società di Capitali): Capital at the Core

Corporations are separate legal entities from their shareholders, offering limited liability and more formal structures—ideal for scalable ventures or businesses seeking investment.

1. Società a Responsabilità Limitata (Limited Liability Company - SRL)

• Best for: SMEs and foreign investors
• Capital:
  • Standard SRL: Minimum €10,000
  • Simplified SRLS: Minimum €1
• Flexibility: Allows sole shareholder (SRL unipersonale)
• Liability: Limited to contributed capital
• Management: One or more directors, even non-shareholders
• Taxation:
  • IRES: 24%
  • IRAP: Varies by region

Note: Most common company type in Italy due to its flexibility and protections.

2. Società per Azioni (Joint Stock Company - SPA)

• Best for: Large businesses, holding companies, or public offerings
• Capital: Minimum €50,000
• Shares: Freely transferable; can have different rights (e.g., dividends, voting)
• Structure: Requires shareholders' meeting, board of directors, and a supervisory body
• Governance models: Traditional, monistic, or dualistic
• Taxation:
  • Dividends to individuals: 26% withholding tax
  • Dividends to corporations: 95% IRES exemption

3. Società in Accomandita per Azioni (SAPA)

• Best for: Family-run companies with external investment
• Hybrid structure: Combines features of SAS and SPA
• Partners:
  • General partners: Manage and bear unlimited liability
  • Shareholders: Provide capital, limited liability
• Shares: Similar to SPA; rights vary
• Taxation & governance: Follows SPA rules, with nuances by partner category

Tax Overview: Partnerships vs Corporations

StructureLiabilityTaxationBest forSocietà SempliceUnlimited (joint)Personal income taxNon-commercial, agricultureSNCUnlimited (joint)Personal income taxSmall commercial businessesSASGeneral: unlimitedLimited: limitedPersonal income taxInvestors & operatorsSRL / SRLSLimitedIRES (24%) + IRAPSMEs, startupsSPALimitedIRES (24%) + IRAP + dividend taxesLarge businessesSAPAGeneral: unlimitedShareholders: limitedIRES + dividend rulesControlled investments

Final Thoughts

Choosing the right legal structure for your business in Italy requires evaluating:

• Your liability tolerance
• Taxation preferences
• Operational goals
• Scalability and investment needs

Whether you need flexibility or want to attract investors, Italy’s legal framework offers a suitable solution.

Legal Support for Your Business

At Agnoloni Law, I help entrepreneurs, foreign investors, and business owners select, establish, and manage the right corporate structure in Italy.

Thinking of starting or restructuring your business?
Let’s connect—expert legal support is just a message away.

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