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Additional-notes-on-the-Business-Register-and-the-Notaries-1The Business Register or Companies Register (Registro delle Imprese) is part of an extensive information sy- stem containing all the main information relating to companies (name, statute, management, headquarters, etc.) and all the subsequent events that have occurred to them after registration (for example changes to the statute and to company officers, changes in registered address, liquidation, insolvency proceedings, etc.).

The Business Register is managed by the Chambers of Commerce.
It is a single system of publication for the entire Country although it is managed through provincial offices.
The objective of the Register is to publish consistent and reliable quality information, making it available to all the stakeholders and the businesses operating in Italy.
Indeed, information not included in the Business Register cannot be used against third parties, unless it is pos- sible to prove that the latter had knowledge of such facts.
A search within the Business Register database (www.registroimprese.it/) will provide sufficient details to con- firm the existence of an enterprise.
Following registration and the payment of fees, a more detailed search can be conducted and Company report
(“Visura”), available both in Italian and English language, downloaded.
In Italy many acts need to be drafted in front a Public Notary, who is a public officer.
Notaries are independent professionals the quality of whose work is safeguarded by important guarantees and is subject to public oversight.
A list of Italian notaries can be found online at the following URL:
Consiglio Nazionale del Notariato www.notariato.it/en/trova-notaio
As for other professionals, notaries are legally obliged to carry out checks on their clients, including non-Italian nationals, by completing formalities required by money laundering laws and beneficial owner identification.

 

Purchase-of-assetsAs an alternative to the previous options, a foreign enterprise may acquire an existing business.
A purchase of a business is realized when it concerns a complex of assets (material and juridical items) functionally connected to each other and likely to become an instrument for carrying out a business activity.

The purchase of a business is generally a single transaction and it can only be carried on by means of public notarial deed or a private deed certified by a notary.
The transaction may involve the entire organization, different businesses owned by the same vendor or a single business unit.
Except as otherwise agreed, the transfer of a business involves what follows:
• in case of a commercial undertaking, within five years from the sale, the seller is barred from starting up a new business whose objects, location or other features is likely to divert the customers;
• the transfer of receivables and debts related to the transferred company, resulting from the compul- sory accounting books;
• the succession in contracts for the exercise of the business activity which are not of a personal nature.

Dissolution-and-liquidation-of-business-entities-1The dissolution of a company follows a four-step process, as follows:
• determining and acknowledging the motivation for winding up the company;
• carrying out of the liquidation activities, including the appointing of a liquidator;

• cancellation of the company from the Business Register;
• filing of corporate books at the Business Register.

Reasons for dissolution are common to all types of companies and are provided by article no. 2484 of the Italian civil code:
• the duration term has expired;
• the company purpose is finally realized, or, ascertained impossibility of its realization, unless the sha- reholder’s meeting is convened without delay to resolve upon the necessary amendments to the com- pany’s bylaws;
• it’s impossible for the company to operate or the shareholder’s meeting is inactive for a prolonged period of time;
• the corporate capital is reduced below the minimum required by the law;
• for other reasons provided by the Law;
• the shareholder’s meeting resolves upon the termination of the company;
• other reasons for winding up may be provided for in the incorporation deed and in the Articles of As- sociation.
The directors without delay shall ascertain the occurrence of a reason for the dissolution and shall proceed with the required actions.
When the directors omit the required actions, the court, upon request from a shareholder or director or statutory auditor, shall ascertain the occurrence of the reason for the termination.
Until the appointment of the liquidators, the directors maintain their powers to manage the company, for the sole purpose of the conservation of the corporate assets’ integrity and value.
The appointment of the liquidators and the dissolution of the relevant powers shall be entered in the Companies Register at the care of the liquidators.
Particular provisions are stated for:
• the drafting of the interim financial statements during the liquidation period and for the final financial statements at the end of the procedure;
• for the submission of the tax returns and related payments in case of corporate or indirect taxes.
Except for situations when the winding up of the company takes place on its natural expiry date and for the reasons stated in its incorporation deed, the winding up becomes effective only from the date of the publication in the Business Register (Registro delle Imprese) of the Directors’ statement setting out the reasons for the li- quidation, or from the publication date of the shareholders’ resolution for the

Setting-up-a-companyItaly offers a wide range of choices of legal forms for setting up companies depending on the company’s or- ganizational model, its commercial objectives, the level of capital to be committed, extent of liability and tax and accounting implications.
Companies: main types

There are two main types of companies in Italy:
• Società a responsabilità limitata (S.r.l.) – limited liability company;
• Società per Azioni (S.p.A.) – stockholding companies (company limited by shares).
The liability of the shareholders/quotaholders is limited to the amount of their contributions to the company.
The company’s incorporation deed must be signed in front of a public notary and the company does not officially exist until it has been registered with the Business Register.
At least 25% of the capital must be paid in on the signing of the Articles of Association (the remainder may be paid later) although contributions in kind must be made in full.
Both types of companies can be incorporated (and, successively, the relevant corporate capital may entirely be held) by a sole shareholder/quotaholder. In this case, in order to benefit of the limited liability, the corporate capital must be fully paid-in.
Article 2328 and following of the Italian Civil Code (for S.p.A) and Article 2463 (for S.r.l.) list the information needed in order to incorporate a company in Italy.
The main differences between the two legal forms are related to:
• corporate Capital. The Law establishes different minimum thresholds for each kind of company;
• in the S.p.A. the capital consists of shares. The minimum share capital of a S.p.A. is equal to € 50,000.00;
• the amount of the share capital must be stated in the memorandum of association. Shares do not have to reflect shareholders’ overall investment in the company;
• the shares are freely transferable. It is normal practice to issue physical share certificates although in listed companies it is also permissible for shares to be in the form of simple accounting records, defined as “dematerialized shares”;
• the company limited by shares is the main type of trading company best suited to substantial inve- stments with a large number of shareholders. It is also the compulsory type for those companies wi- shing to be listed on the stock exchange;
• in the S.r.l. the capital consists of quotas. The minimum capital of a S.r.l. is equal to €1;
• when setting up limited liability companies with capital equal to or greater than €10,000, at least 25% of the capital must be paid to

Accounting-and-audit-requirements-1Accounting requirements
All companies and partnerships are required to keep books and records of accounts, as well as keep in order all original documents sent and received for each concern.
The accounting documents must be kept for no less than ten years.

Accounting records may be kept directly by the business at their premises, or by third parties outside the com- pany offices.
There are two main compulsory accounting systems available depending on the company’s features and the amount of income declared in the previous year: one ordinary and one simplified (suitable for small entities with a simple organization).
The ordinary accounting scheme is compulsory:
• for company providing services with a turnover exceeding EUR 400,000 yearly;
• for the other companies with a turnover exceeding EUR 700,000 yearly.
The following registers and corporate books can be compulsory on the basis of the size and of the activity per- formed:
• the journal;
• the general ledger;
• the VAT registers;
• the inventory register;
• the shareholders/quotaholders meeting books;
• the BoD meeting book (if applicable);
• the Board of Auditors meeting book (if applicable).
Books and records of accounts are kept according to the provisions of the Italian Civil Code and the tax regu- lations.
Accounting books can also be kept electronically.
Companies with share capital are also required to prepare their annual Financial Statements and to file them with the Companies Register, within 30 days from its approval by shareholders.
In addition to the ordinary FS form provided by the Civil Code, a short form and a reduction in the amount of the information required are established for “small” and “micro” companies.
Partnerships, instead, are required to draw up an annual report indicating profit and loss for tax purposes, al- though there is no filing obligation with the Register of Companies.
Annual accounts must be presented to and approved by the shareholders’ annual general meeting within 120 days from the company’s financial year end (180 days in specific situations and under certain conditions).
Audit requirement
Auditing is required for:
1) S.p.A.;
2) S.r.l. exceeding two of the following limits for 2 consecutive years;
• total assets of EUR 4,400,000;
• sales and services revenues of EUR 8,800,000;
• average number of employees during the year 50;
• or, if the S.r.l. controls a company subject to statutory audit;
3) all companies drawing up consolidated Financial Statements;

Establishing-an-Italian-branch-of-a-foreign-company-1The Italian branch/secondary registered office is not a separate legal entity and the parent company is respon- sible for its initiatives, although it is subject to taxation in the foreign country where the economic activity is carried out.
The definition of permanent establishment (PE) is provided by article 5 of the OECD model tax treaty and by ar- ticle 162 of the Italian tax code (TUIR).

In particular, according to aforementioned articles, “the term permanent establishment means a fixed place of business through which the business of an enterprise is wholly or partly carried on.
The term PE includes especially:
a. a place of management;
b. a branch;
c. an office;
d. a factory;
e. a workshop, and
f. a mine, an oil or gas well, a quarry or any other place of extraction of natural resources.” Therefore, the definition contains the following conditions:
• the existence of a “place of business”;
• this place of business must be “fixed”;
• the carrying on of the activity through this fixed place.
According to the above Law, due to the fact that a PE is not easily identifiable, the Italian Authorities (e.g. Re- venue agency) can assume the presence of a hidden permanent establishment in Italy of a foreign company if some conditions occur (an office in Italy, Italian employees, Italian contracts, Italian managers).
Details of the branch office must be registered with the Business Register (Registro delle Imprese). The registration of a branch office is governed by the Italian civil code (Codice Civile).
In order to incorporate a branch, it will be necessary to:
1. draft the Minute of the shareholder’s meeting (or of the Board of Directors Meeting according to the By- Laws) of the foreign parent company resolving:
a. to open a branch (including the address of the legal office of the new branch, the business activity that will be performed and the financial period of the Italian branch);
b. to appoint a legal representative or “preposto” (including his personal data);
c. to grant the legal representative with the required powers (power of attorney);
2. open an Italian fiscal code for the legal representative of the Italian branch (“preposto”);
3. draft the act of incorporation in front of an Italian public Notary;
4. submit the incorporation act to the Chamber of Commerce;
5. submit the commencement activities declaration to the Italian Revenue Agency.
The deed of appointment, the certificate of incorporation, the articles of association and the registration details of the foreign company must be

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