Amendments concerning the payment of capital for the incorporation of an Italian-law limited liability company produced some interpretation issues to which the National Council of Notaries has provided clarifications.
Amendments made by Legislative Decree No. 76/2013 to the text of art. 2464, paragraph 4, of the Italian civil code, concerning the payment of capital for the incorporation of an Italian-law limited liability company, produced some interpretation issues to which the National Council of Notaries has since provided clarifications and operational guidance.
Intended to simplify the process of setting up a limited liability company in Italy, the new regulation provides that cash contributions of at least 25% of the capital (or of the entire quota capital in the presence of a sole member) no longer need to be deposited into a restricted bank account, but may be transferred directly to the persons entrusted with the management of the company and duly appointed in the memorandum of association.
The National Council of Notaries document No. 148 of 17 May 2016 was issued to clarify the interpretation doubts raised by the new formulation of the regulation, especially those related to the adequate means of payment to make a cash contribution and who their recipients are.
As to the suitable means of payment to make cash contributions, it is believed that, in the incorporation stage of a company, any means of payment can be used, provided it is able to supply funding to the new company.
The various means of payment include:
- bank transfer, in favour of one of the directors to be appointed
- cash, obviously in full compliance with the limits imposed by legislation on the use of cash 3) banker’s draft, made out to the new company or on behalf of one of the directors to be appointed.
All this without prejudice to the possibility of depositing the contribution into a restricted bank account held in the name of the new company, in accordance with the provisions in force for the establishment of a joint-stock company (società per azioni).
Irrespective of the payment means being used for the transfer, the memorandum of association shall report the indication thereof in order to guarantee the correctness of the directors’ behaviour and payment traceability.
As to the identification of the recipients of the payments, the document published by the National Council of Notaries highlights that the directors to be appointed are the persons eligible to receive and hold the cash contribution, without the need to deposit the amounts into a restricted bank account held in the name of the company up to the registration of the memorandum of association in the Companies’ Register.
As a result, the recipients of the payments can be the new company, one or more directors to be appointed, or third parties appointed by them.
The notary entrusted with the task of drafting the memorandum of association must necessarily include and describe in the deed all information regarding the transfer of the contribution and the payment means used. In this regard, it should be noted that the directors’ presence at the moment the memorandum of association is signed is not necessary and, therefore, in case they are absent, the transfer can take place in favour of one or more of the directors before the signature of the memorandum of association or, at the same time of the signature, in favour of third parties duly delegated to withdraw cheques on behalf of one or more directors.
As a matter of fact, the notary who drafts the deed could also be authorised to receive the cheques and, therefore, at the time of incorporation, he/she would be entrusted with the amounts needed to pay up the capital. The notary will then have to record the amounts or securities received in the Securities and Amounts Register (Registro Somme e Valori), along with the ensuing allocation to the management body, should the contribution take place at the same time as the signature of the deed.