On 20 July 2016, the incorporation of innovative start-­‐ups in the form of limited liability companies (“società a responsabilità limitata” (s.r.l.)) through the execution of an electronic document with digital signature (and the consequent exclusion of the compulsory resort to a notary) has become reality.

The Italian Ministry of Economic Development (“MISE”) has approved by directorial decree of 1 July 2016 (whose provisions have entered into force effective as of 20 July 2016) the technical specifications for the electronic model of articles of association and by-­‐laws relating to start-­‐ups incorporated as limited liability companies (s.r.l.).

  1. Foreword – regulations on innovative start-­‐ups incorporated as limited liability companies (s.r.l.)

The on-­‐line incorporation of innovative start-­‐ups in the form of limited liability companies (s.r.l.) without the intervention of a notary represents, nowadays, a real newness.

Indeed, by directorial decree of 1 July 2016 the Italian Ministry of Economic Development (“MISE”) has approved the technical specifications for the structure of the electronic model of articles of association and by-­‐laws of innovative start-­‐ups incorporated as limited liability companies (s.r.l.), marking a further step in the process of regulatory promotion of innovative enterprises started with Decree Law no. 179 of 2012 that introduced for the first time in our legislation the innovative start-­‐up institution.

The development of the regulations concerning innovative start-­‐ups continued with Decree Law no. 3 of 2015; indeed, article 4, paragraph 10-­‐bis of such Decree Law – on the one hand -­‐  abolished  the obligation to resort to a notary for the stipulation (and subsequent amendments) of the articles of association relating to innovative start-­‐ups incorporated as limited liability companies (s.r.l.) and – on the other hand -­‐ introduced the possibility, as alternative choice, to stipulate said deed (rather than by public deed) through an electronic document executed by digital signature according to the modalities laid down in articles 20 and the following of the e-­‐Government Code (“eGC”) on the basis of a standard model of articles of association and corporate by-­‐laws whose preparation was entrusted to the  Minister of Economic Development.

By decree of 17 February 2016 (“Ministerial Decree”), the Minister drew up the standard model of articles of association and corporate by-­‐laws of innovative start-­‐ups incorporated as limited liability companies (s.r.l.) referred to in the aforesaid article 4, paragraph 10-­‐bis of Decree Law 3/2015, delegating however to the MISE the promulgation of a further decree approving the technical specifications for the electronic compiling, stipulation and filing of the articles of association and of the relevant by-­‐laws.

In compliance with the Minister’s direction, on 1 July 2016 the MISE issued a directorial decree (“Directorial Decree”), effective as from 20 July 2016, whereby it established the aforesaid technical specifications to be complied with by software programs that may be used in the process of simplified incorporation of innovative start-­‐ups incorporated as limited liability companies (s.r.l.).

Moreover, simultaneously with the Directorial Decree, the MISE issued circular no. 3691/C whereby it provided the Chambers of Commerce with specific instructions and clarifications on the new procedure for the compiling, stipulation and filing of articles of associations and relevant corporate by-­‐laws of innovative start-­‐ups incorporated as limited liability companies (s.r.l.)(1).

  1. Simplified incorporation procedure: applicability framework

Very briefly, article 25 of Decree Law 179/2012 considers as innovative start-­‐ups (that may, therefore, benefit from the relevant advantages on capitalisation, corporate governance, tax incentives, access to bank lending, etc.) joint stock companies, including those incorporated as cooperatives, residing in Italy or in another Member State of the EU provided that they have one production site or branch in Italy, whose exclusive or prevailing corporate object is the development, production and marketing of innovative products or services having a high technological value and meeting the further minimum requirements provided for by Law Decree 179/2012 (by way of example with reference to composition of the holding structure, incorporation methods, turnover amount, percentage of production costs dedicated to research and development activities, employment of highly-­‐skilled personnel in research and scientific activities, ownership of industrial property rights, etc.).

Although the definition of innovative start-­‐up under article 25 of Decree law 179/2012 makes reference, as to company form, to all joint stock companies (including those incorporated as cooperatives), the Ministerial Decree gave greater priority to the elaboration of a standard model of articles of association and relevant by-­‐laws only with regard to innovative start-­‐ups incorporated as non-­‐simplified limited liability companies (s.r.l.) owing to their large number (nowadays they represents approximately 80% of the start-­‐ups registered in the relevant special section of the chambers of commerce), as well as to the particularly favourable regime that Decree Law 179/2012 reserves exclusively to such type of start-­‐ups (which includes the regulation relating to the different classes of shares, the possibility to carry out transactions on treasury shares, the possibility to issue participating financial instruments, the possibility to make recourse to the so-­‐called equity crowdfunding).

  1. Simplified incorporation procedure: fulfilments and formalities

The Directorial Decree of 1 July 2016 provides for a detailed legislation concerning the procedure and formalities required for the incorporation of an innovative start-­‐up in the form of limited liability company (s.r.l.) through an electronic process based on digital signature, specifying, in particular, the modalities for the drafting of the relevant articles of associations and by-­‐laws, the registration of the incorporation deeds, the temporary registration in the ordinary section of the companies’ register, the registration in the special section dedicated to innovative start-­‐ups and the relevant anti-­‐money laundering  verifications.

      3.1   Model of articles of association and by-­‐laws

The articles of association and by-­‐laws of innovative start-­‐ups incorporated as limited liability companies (s.r.l.) must be drafted in compliance with the relevant standard model attached to the Ministerial Decree of 17 February 2016, in electronic form and executed by digital signature pursuant to Article 24 of the eGC by each of the relevant subscribers, in case of multi-­‐person companies(2), or by the sole subscriber in  case  of single-­‐member company, by using  the dedicated  web  platform startup.registroimprese.it (hereinafter the “platform”).

In particular, the platform makes available to the user a model of articles of association and of by-­‐laws rather complete and complex which must be filled-­‐in with appropriate care and expertise; indeed, such models provide for a number of pre-­‐selected boxes each containing a specific clause, some of which mandatory, some others optional, which provide for different selectable options.

In this respect, it should be noted that the model of by-­‐laws provided by the Ministerial Decree contains a number of clauses selectable by the user in order to govern aspects, even rather complex, concerning the operation of the company, such as by way of example: the possibility to make recourse to participating financial instruments, the possibility to issue quotas with special rights, limits to the circulation of quotas in case of multi-­‐person companies (e.g. pre-­‐emption right, right of refusal, lock-­‐up, tag-­‐along right and drag-­‐along clauses etc.), circumstances of voluntary exercise of withdrawal right, etc.

     3.2     Formalities concerning the registration of incorporation deeds

As concerns tax related formalities connected with the incorporation process of innovative start-­‐ups in the form of limited liability company (s.r.l.), since it is not yet possible to pay taxes due in connection with the incorporation deeds by self-­‐assessment (“auto-­‐liquidazione”), in order for the company to be enrolled in the competent companies’ register it will be necessary to first register the relevant incorporation deed for tax purposes through the “registration” function available on the platform.

The platform shall then transmit to the competent office of the Italian revenue agency, by means of certified e-­‐mail (“PEC”), the articles of association and the relevant by-­‐laws executed as specified above, as well as any other ancillary documents and the relevant payment receipt issued upon registration of the deed completed as above.

Thereafter, the Italian revenue agency will transmit, in its turn, to the user the details of the relevant registration.

Once the registration is completed, the articles of association and the relevant by-­‐laws, with the relevant registration details, will be  transmitted, through a single communication file (“pratica di comunicazione unica”) to the relevant companies’ register competent on a territorial basis.

    3.3      Temporary registration with the ordinary section of the companies’ register and registration in the special section

According to the regulations, together with the application form for the registration with the companies’ register, the user has to file an application for the registration of the company in the special section of the companies’ register dedicated to innovative start-­‐ups.

In this respect, it should be taken into account that the procedure for the registration of the company in the special section is subject to its prior temporary registration in the ordinary section of the companies’ register competent on a territorial basis.

Once the registration application has been received in accordance with the terms briefly described in paragraph 3.2, the companies’ register will automatically register the file and start the verifications required for such purposes under article 2, paragraph 2 of the Ministerial Decree, which include, among others, verifications with respect to:

  • compliance of the articles of association and the corporate by-­‐laws with the regulatory models;
  • execution with digital signature by all subscribers within the established deadline;
  • existence of all the  requirements needed  for the application  of the regulations  on  innovative start-­‐ups;
  •  legal   capacity   of   the   subscribers;
  • compliance with the regulations on the protection of blind, low vision, deaf, deaf and dumb contacting parties or foreign contracting parties who do not understand the Italian language;
  • observance  of     the  provisions  of  article  2343  of  the  Italian  civil  code  on  subscription  of corporate capital by contributions in kind;
  • administrative   verifications   provided   for   by   article   11   of   Directive   no.   2009/101/EC   (on safeguards for the protection of members or third parties);
  • fulfilment  of  the  obligations  relating  to  anti-­‐money  laundering.

With respect to anti-­‐money laundering, it is interesting to see how the Directorial Decree has entrusted, for the first time, the competent offices of the companies register with the carrying out verifications (i.e. anti-­‐money laundering verifications pursuant to Legislative Decree no. 231/2007) which so far were not falling within the competence of such offices.

In case the abovementioned verifications produce satisfactory results, the companies’ register office shall, within 10 days from the date of registration of the filing of the registration application, register the company in the ordinary section of the companies’ register, with the additional caption “start-­‐up incorporated under article 4, paragraph 10-­‐bis of Decree Law no. 3 of 24 January 2015, temporarily registered in the ordinary section, registration in the special section pending”.

Upon final registration in the special section, the office will automatically remove the caption “temporarily registered in the ordinary section, registration in the special section pending”.

On the contrary, should formal irregularities emerge, the companies’ register office shall have to suspend the procedure for the registration and grant all subscribers, by means of certified e-­‐mail, an appropriate term no longer than 15 days in order to remedy such irregularities.

Should such irregularities not be remedied within the designated deadline, the keeper of the companies’ register, by means of reasoned decision, will reject the registration of the company in the ordinary section of the companies’ register.

Subscribers may file within 8 days an appeal with the Judge of the companies’ register, who will decide according to article 2189 of the Italian Civil Code.

Once the company has been temporarily registered in the ordinary section of the companies’ register and subject to satisfactory results produced by further verifications concerning the status of innovative start-­‐up, the office will automatically register the company in the special section of the companies’ register dedicated to “innovative start-­‐ups” according to the standard procedure set out in article 25 of Decree Law no. 179/2012(3)

In this regard, it should be noted that failure to register the company in the special section implies the automatic exclusion of the company also from the ordinary section of the companies’ register pursuant to article 2189 of the Italian Civil Code, and, thus, the complete cancellation of the company from the companies’ register.