The term Start-up is used to indicate the initial development phase of a newly incorporated company that is presented on the market for the first time, or of an already existing company that is launched again on the market after having been acquired and restructured. The start-up phenomenon is constantly growing today in Italy and is able to communicate the vitality and frequent changes in the labour market. This activity cannot come from improvisation. The right approach together with a strong motivation and technical expertise are crucial in order to transform an idea in a practical and successful business.
What definition do we give to the term Start-up? A start-up is a business built on the innovative idea of new entrepreneurs, frequently in the technology field, characterized by a restrained budget but with a high development potential.
Which are the requirements a new company must fulfil to be defined as a start-up?
- The majority of the share capital and of the voting rights must be detained by natural persons from the incorporation and for the following 24 months;
- It must have been established for no longer than 48 months;
- It must have its principal place of activity and interests in Italy;
- It must have no turnover or a turnover not exceeding 5 million €;
- It must not distribute dividends;
- Its scope of activity must consist in innovative goods and services of high technological value;
- It does not originate from a merger, demerger or disinvestment process.
- Moreover, the start-up must respect one of the following requirements:
- Research & Development expenses must be at least the 20% of the highest between value of production and cost of production;
- At least one third of the team is made up of people who either hold PhD or are PhD candidates at an Italian or foreign University or have conducted research work for at least three years or at least two third of the team is made up of people holding a Master’s degree;
- It is the owner or the licensee of a patent or registered software regarding an industrial or biotechnological invention, the topographical representation of a product or a vegetal species directly related to the social purpose and activity.
Companies that meet all the above-mentioned requirements will be granted the possibility of be enrolled in a special section of the Company Register and will benefit the advantages set forth by the Italian regulation, among which:
Reduction in the expenses needed for the incorporation
The Start-up is exonerated from the payment of stamp duties and secretary rights for the enrolment in the Register, as well as from the payment of the annual fee for the Chamber of Commerce.
Carry over for the losses of the year
The period for deliberating the recapitalization after losses that exceed one third of the share capital or that cause its reduction under the minimum threshold is extended of one year for Start-ups.
Governance policies for Limited Liability Start-up
The Start-up, also if incorporated as a Limited Liability Company, can benefit the following advantages: a) it can use share companies??? organs and procedures; b) it can offer participation shares to the public; c) it can perform operations on its own shares.
Remuneration of employees through financial instruments
The law introduces a specific favourable tax and remuneration regime for the remuneration of directors and employees through incentive stock option plans.
Innovative Start-up can sign fixed-term employment contracts which length is comprised between 6 and 36 months.
- Incentives for who wishes to invest in innovative Start-up
Risk capital collection through online portals
Crowdfunding) (Widespread innovative mean to harvest capital from the public.
Support for internationalisation
Innovative Start-up operating in Italy can benefit from the services offered by ICE Agency and Italy Desk for the foreign promotion and internationalisation of businesses.
Crisis management and supervision activity
Start-up are governed by the regulation on crisis management???? applicable to non-fallible subjects, according to which the only consequence is the segregation of the assets needed to repay the creditors and not the loss of the power of administration for the manager.
The Best Company for you
December 19th , 2012 saw the entry into force of Law n. 221/2012, converting Law Decree n. 179/2012, aimed at regulating and implementing the Italian national growth and development. Particularly, section IX of the above mentioned law is dedicated to the introduction of a new company form, the so-called innovative start-up. Pursuant article 25, the innovative start-up is defined as a corporation, also in the form of a cooperative company, incorporated under the Italian jurisdiction or as a European SocietasSICURI CHE SI DICA COSì?, whose shares or participations are not listed on regulated markets or on a multilateral trade system. The category therefore includes Limited Liability Companies (also in the simplified or reduced capital form), Corporations, Partnerships Partly Limited by Shares and Cooperative Companies.
The incorporation of new companies by young entrepreneurs, especially innovative start-up with a high development potential, is considered as one of the key necessary milestones? for the economic growth of the entire nation. For this reason, starting from 2012, new rules have been enforced and new company forms have been introduced with the aim of incentivising the development of the business community. Particularly, Law Decree n. 1 of January 24th 2012 implemented the Simplified Limited Liability Company, originally established for natural persons under 35. The Over 35 could instead access the similar Limited Liability Company with reduced capital that presented less advantages in the incorporation phase. However, not later than one year after, Law Decree n. 75/2013 completely altered the above mentioned models while also rewriting article 2463 of the Italian Civil Code. In particular, the age requirements for the simplified limited company was abolished, thus allowing everyone to incorporate this legal form and therefore causing the elimination from the law of the limited company with reduced capital.
To sum up, the main characteristics of the Simplified Limited Liability Company, as redefined in 2013, are:
- The articles of incorporation must be drafted by a public notary in the form of a public deed, but no notarial fee is due;
- The share capital must be comprised in the range between 1€ to 9.999€;
- The contributions must be made in cash;
- The enrolment in the Company Register is performed by telematics means and is not subject to stamp or secretary duties.