Why they are discussed so much
When a business grows, the question always comes up:
should I continue as a sole proprietor (Partita IVA) or switch to a company?
The two most commonly used forms in Italy are the Italian S.r.l. and the Italian S.r.l.s.
Both allow you to run a business in a structured way, but they are based on different logics and respond to different needs.
Understanding what they really are helps avoid rushed decisions, often made only to “save money at the beginning.”
The key concept: limited liability
There is only one real starting point.
Italian S.r.l. and Italian S.r.l.s. are capital companies with full asset autonomy.
This means that:
- the company is a legal entity separate from the individuals
- the company’s assets are separate from the shareholders’ personal assets
- the company’s debts do not automatically fall on the shareholders
Under normal conditions, shareholders risk only what they have contributed.
Personal assets remain protected, except in cases of improper management or unlawful use of the company.
This protection is what makes capital companies very different from an individual Partita IVA under Italian law.
The Italian S.r.l.: structure, capital, and flexibility
The Italian Limited Liability Company (S.r.l.) is a corporate form designed to adapt to different contexts.
Key characteristics:
- it can have one or more shareholders
- it can also exist with a single shareholder
- it requires a minimum share capital of €10,000
At the time of incorporation:
- with multiple shareholders, it is sufficient to pay in 25% of the capital
- with a sole shareholder, the full capital must be paid in
The contributed capital becomes the property of the company.
From that moment on, the company is liable for its obligations with its own assets.
The real strength of the Italian S.r.l. is customization.
The articles of association and bylaws can be tailored to the shareholders’ needs, precisely regulating:
- management
- shareholders’ rights
- transfer of quotas
- decision-making processes
This makes the Italian S.r.l. suitable even for projects with growth ambitions.
The Italian S.r.l.s.: simplified access to business
The Italian Simplified Limited Liability Company (S.r.l.s.) was created with a specific goal:
to lower entry barriers for those who want to start a business in Italy.
Distinctive elements:
- shareholders must be natural persons only
- share capital from €1 to €9,999
- capital fully paid in at incorporation
- mandatory use of a standard articles of association
Here, simplification comes at a price:
it is not possible to customize the bylaws.
The rules are predetermined and cannot be modified.
It is not possible to include special clauses or tailor-made shareholder agreements.
Attention: fiscally it is not “simpler”
A very common mistake is to think that the Italian S.r.l.s. is lighter also after incorporation.
In reality:
- taxation is identical to that of an Italian S.r.l.
- ordinary accounting is mandatory
- annual financial statements are mandatory
- the same tax and reporting obligations apply
In addition, the Italian S.r.l.s. has a specific obligation:
- to allocate one fifth of profits to a legal reserve
- until the share capital reaches €10,000
This mechanism is designed to strengthen the company’s equity structure over time.
Two models, two different purposes
Italian lawmakers introduced two distinct instruments because needs are not the same.
In summary:
- the Italian S.r.l. prioritizes flexibility, solidity, and credibility
- the Italian S.r.l.s. prioritizes accessibility and lower initial costs
The choice should not be made “because it’s trendy” or only to spend less at the beginning.
It should be made based on:
- the project
- expected volumes
- future prospects
Conclusion
Italian S.r.l. and Italian S.r.l.s. both offer limited liability, but follow different logics.
Understanding what they really are is the first step to:
- not underestimating constraints
- avoiding surprises after incorporation
- building a company consistent with your professional path
👉 Do you want to understand which solution is more suitable for your case?