On October 20, 2014, with the publication of the “Executive Summary of Italy’s Startup”, the Ministry for Economic Development pulled the strings of the regulatory impact assessment on innovative start-up. On the occasion of the project “The Italian Start-up Ecosystem: Who’s Who?”, held at SMAU of Milano, on the following days of October, 20-22, the most recent figures show growth of innovative start-up from 1227, in 2013, to 2716, in 2014.

So, let’s see what is this “fast growing” business form.

The innovative Start-ups, introduced by Law Decree n. 179 of October 18th, 2012, are limited liability companies – incorporated under Italian law within the previous 48 months – whose sole or main social purpose is the development, production and sale of highly technological innovative products and services.

Tracing back the great development of innovative start-ups we saw is quite easy, given that the entrepreneurs enjoy the following advantages: tax and social security contributions exemptions, investment incentives, self-certification for online registration, exemption from administrative fees and stamp duty, exclusion from bankruptcy proceedings.

Moreover, we must remember exemptions from the regulations provided for corporate innovative start-ups set up as Ltds. As you know, art. 2468 of the Italian Civil Code contains a number of limitations in respect of Ltd. shares, designed to prevent the dispersion of participation rights in the general audience: the soul of this company type Ltd. is in fact that of a narrow based company.

Things however change with respect to innovative start-ups, expressly designed to attract entrepreneurial talents and capitals from abroad.

Article. 26 of Law Decree n. 179/2012 provides for the possibility of creating classes of shares equipped with different rights, even without the right to vote, the contents of which can be freely determined in the articles of incorporation. The rule of proportionality between the value of the quota and voting rights is waived, and the voting right can be restricted to particular themes or conditional upon the occurrence of certain events.

Finally, in order to open up the market for these companies, the participations can be offered on the markets as financial instruments.

Furthermore, while up to 2012 the concept of stock options was banned from Ltds, given the rule set by article 2474 of the Civil Code, the new regulation now allows innovative start-ups to operate on their own quotas, as far as the operation is part of an incentive plan for the employees.

The questions and debates about the legitimacy of such derogations deserve neither space nor value: the arrangements to encourage the creation and growth of new businesses are due to economic initiatives, a constitutionally guaranteed freedom.