Corporate & commercial Law

Italian Limited Company (Srl) and Joint Stock Company (Spa): differences and governance

Meaning of SRL and SPA

Main differences

In the Italian legal system, within the category of capital companies, there are several types of companies that are addressed in Book Five, Title V of the Civil Code, specifically titled “On Companies.”

In Italy, two common forms of capital companies are the “S.p.A.” (Società per Azioni) and the “S.r.l.” (Società a Responsabilità Limitata). Here are the main characteristics and differences between them:

Legal Structure

S.p.A. is a public limited company that can offer its shares to the public. It is subject to more stringent regulations and reporting requirements.

S.r.l. is a limited liability company typically with a smaller number of shareholders. It cannot offer its shares to the public and has fewer regulatory requirements compared to S.p.A.

Minimum Capital

S.p.A. requires a minimum share capital of €50,000, and at least 25% of this capital must be paid upon incorporation.

S.r.l. has a lower minimum share capital requirement of €10,000, and the entire capital must be fully paid upon incorporation.

Number of Shareholders

S.p.A. can have a large number of shareholders as there is no minimum limit on the number of shareholders.

S.r.l. can have a minimum of one shareholder and a maximum of 120 shareholders.

Transfer of Shares

S.p.A. shares are generally freely transferable without the consent of other shareholders.

S.r.l. often requires the approval of other shareholders for the transfer of shares.


S.p.A. typically has a two-tier management structure with a Board of Directors and a Board of Statutory Auditors.

S.r.l. can be managed by one or more managers, who may or may not be shareholders.

Disclosure and Reporting

S.p.A. is subject to more extensive disclosure and reporting requirements, including the publication of financial statements.

S.r.l. has fewer reporting obligations compared to S.p.A.


S.p.A. is commonly used for larger and more complex business operations and is suitable for companies seeking to raise capital from the public.

S.r.l. is often chosen for small to medium-sized businesses with a more limited number of stakeholders.

These are some of the key differences between S.p.A. and S.r.l. in Italy. The choice between these two forms depends on various factors, including the size and nature of the business, the number of shareholders, and the desired level of regulatory compliance.


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Internal Governance 

First and foremost, it is important to emphasize that capital companies possess complete legal autonomy (Article 2325, paragraph 1, Italian Civil Code). This means that the company’s assets are distinct from the personal assets of individual shareholders. As a result, specific creditors of shareholders cannot seize the company’s assets to fulfill their claims, and vice versa, the company’s creditors cannot access the personal assets of the shareholders. In simpler terms, shareholders are not personally liable for the company’s obligations

This particular aspect distinguishes the two types of companies known as “S.r.l.” (Limited Liability Company) and “S.p.A.” (Joint-Stock Company). However, in the case of “S.a.p.A.” (Società in Accomandita per Azioni – Partnership Limited by Shares), there is a category of shareholders called “accomandatari” who have unlimited and joint liability for the company’s obligations, despite having a shareholding represented by shares.

The liability of shareholders for the company’s obligations is limited to the value of the shares they have contributed in the case of an “S.p.A.” or the ownership interest they hold in the case of an “S.r.l.” This distinguishes them from partnerships, where imperfect legal autonomy is a characteristic feature, and individual partners bear personal liability for the partnership’s obligations.

Therefore, medium and large-scale businesses operating in various sectors across the country can adopt the legal forms of “S.p.A.” or “S.r.l.” These companies have legal personality, which grants them special treatment by the legislature as distinct legal entities separate from the shareholders themselves.

Legal personality is obtained for both types of companies through the registration of the public deed of incorporation by a notary in the Companies Register, which is a public register established by Law No. 580/1993 for the reorganization of the Chambers of Commerce.

Within capital companies, there are three essential organs: 

  1. the shareholders’ meeting
  2. the board of statutory auditors (collegio sindacale)
  3. the board of directors (consiglio di amministrazione). 

Each of these organs plays a distinct and equally important role in the internal organization. It is crucial to note the clear distinction between the status of a shareholder and the power to manage the company. Shareholders exercise their voting rights during the shareholders’ meeting and participate in the appointment of directors and statutory auditors.

The directors are responsible for implementing the company’s purpose and managing its affairs, while the shareholders’ meeting makes significant decisions regarding the company’s organization and operation. Statutory auditors have a supervisory and control function over the activities carried out by the directors.

What are the shareholders responsibilities?

The ordinary shareholders’ meeting addresses the following matters:

  1. Approval of the financial statements.
  2. Appointment or removal of corporate officers.
  3. Resolutions concerning the liability of statutory auditors and directors.
  4. Resolutions on other matters required by law or submitted for consideration by the directors and statutory auditors.

The extraordinary shareholders’ meeting addresses:

1. Amendments to the company’s articles of association (statuto).

2. Powers and appointment of liquidators.

These distinctions help clarify the roles and responsibilities of the various organs within Italian capital companies and the types of decisions made by each.

Currently, the “innovative startup” (D.L. 179/2012) represents a strongly incentivized form of capital company in Italy, given its crucial role in the digitalization and modernization of Italian industry. Recently, there has been a requirement introduced for the articles of incorporation of such startups to be drafted before a notary. Ongoing efforts are being made to develop new procedures aimed at simplifying the bureaucratic requirements necessary for starting this rapidly expanding type of innovative business.

The Legislative Decree No. 6 of 2003, titled “Organic Reform of the Regulation of Capital Companies and Cooperative Companies, in Implementation of Law No. 366 of October 3, 2001,” contains the amended regulation of the “S.r.l.” (Limited Liability Company). This regulation is found in Chapter VII, Title V, Book V of the Italian Civil Code. According to Article 2462 of the Civil Code, only the company is liable for its social obligations with its assets.

An “S.r.l.” can be established and launched through a contract or unilateral deed, provided it is drawn up as a public deed and contains the elements prescribed in Article 2463 of the Civil Code. Regarding the minimum and initial share capital, Article 2463, paragraph 4, of the Civil Code allows for the possibility that the share capital can be determined at an amount less than ten thousand euros and at least one euro. This option to start a regular “S.r.l.” with a share capital of less than €10,000 was introduced by Legislative Decree No. 76 of 2013.

The main characteristics of an “S.r.l.” include the significant role of the shareholder and the relationships between shareholders, an expanded scope for statutory autonomy, and freedom in organizational forms.

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