S.n.c.: how it works, requirements and costs

The società in nome collettivo (S.n.c.) is one of the business structures often chosen by those starting a small or medium-sized business in Italy. It’s a type of partnership with a simple setup, relatively low costs, and often used for family-run businesses or where trust between partners is essential.

In an S.n.c., all partners have unlimited and joint liability–and that’s a crucial point. If the business can’t meet its obligations, creditors can go after the partners personally, including their private assets.

So, how do you set up an S.n.c.? What are the costs, how is it taxed, and what legal obligations come with it (like–do you really need a business account)?

Let’s break it down.

Summary

1. What is a società in nome collettivo (S.n.c.)?
2. Differences from a sole proprietorship, S.a.s., or S.r.l.
3. How to open an S.n.c.
4. Business account for an S.n.c.
5. Setup costs and annual fees
6. Closing an S.n.c.
7. Advantages and disadvantages of an S.n.c.
8. When is an S.n.c. the right choice?
9. Frequently asked questions

What is a società in nome collettivo (S.n.c.)?

An S.n.c. is a partnership in which all partners are personally liable–with both their capital and private assets–for the company’s obligations. It must have a registered address, a legal name (company name), and at least two partners, all of whom act as managers (you can’t set up a single-person S.n.c., in other words). It’s established through a public deed or private agreement, drawn up by a notary, which outlines the company’s purpose and management structure.

Unlike capital companies, the law doesn’t assign legal personality to an S.n.c., and no minimum capital is required to set one up. An S.n.c. is also not a public entity, meaning it’s not required to publish financial statements. Plus, there’s no clear separation between company assets and the personal assets of the partners.

Partners in an S.n.c.

An S.n.c. can include both capital partners (who contribute funds) and working partners (who contribute their skills, time or services). All partners are entitled to a share of the profits, as defined in the company’s founding agreement.

By default, all partners have the right and obligation to manage the business. Even if some partners are not actively managing, they still enjoy broad rights to information and oversight. Profits and losses are usually split according to ownership shares, or equally if not otherwise specified.

Liability

The defining feature of an S.n.c. is its liability structure:

• Unlimited: Each partner is liable not just for their share, but for all company debts.
• Joint and several: A single partner could be forced to repay the entire debt–even if they weren’t directly responsible for it.
• Subsidiary: Creditors must first go after the company’s assets. If that’s not enough, they can go after the partners’ personal assets.

In the event of financial trouble, a creditor can legally recover what’s owed by targeting the business first, and then the personal wealth of one or more partners. That’s why an S.n.c. is typically chosen by close-knit teams–often family or long-term collaborators–who are comfortable with full transparency and mutual trust.

Differences from a sole proprietorship, S.a.s., or S.r.l.

Compared to a sole proprietorship, the S.n.c. offers a more structured setup and the chance to share management duties with other partners. However, as a partnership, it cannot access the simplified flat tax scheme (regime forfettario) and comes with stricter bookkeeping requirements. In terms of liability, the risk is similar: just like a sole trader, S.n.c. partners have unlimited personal liability.

In a società in accomandita semplice (S.a.s.), there are two types of partners:

• General partners (accomandatari), who are active in the business and have unlimited liability
• Limited partners (accomandanti), who contribute capital and have limited liability

In contrast, an S.n.c. makes no distinction–all partners share unlimited liability equally.

The comparison shifts when looking at an S.r.l. (limited liability company). In an S.r.l., liability is limited to the capital invested, meaning that if the company fails, the partner only risks losing their initial investment.

So, if your priority is protecting your personal assets, an S.r.l. is the safer choice. But if you're looking for a faster, lower-cost setup, an S.n.c. might be the better fit.

How to open an S.n.c.

To start an S.n.c., the first step is choosing the company name (denominazione sociale). It must be unique (not used by any existing business), include the name of at least one partner, and clearly show the legal form–e.g. “Rossi & Bianchi s.n.c.”

Next, you’ll need a founding deed (atto costitutivo). This can either be drafted by a notary as a public deed or signed privately by all partners and authenticated by a notary. This document must include:

• Names and personal details of all partners
• The company name
• The registered business address
• The corporate purpose (description of the business activity)
• The capital contributions from each partner and their assigned value
• Each partner’s share of ownership
• The rules for splitting profits and losses
• The duration of the company

Alongside the founding deed, you’ll also need a company statute. This outlines how the business will operate: management procedures, partner powers, withdrawal terms, what happens if a partner dies, and how the company would be dissolved.

Once the documents are finalised and signed, the notary submits a Single Communication (Comunicazione Unica) online to the Business Register, which covers multiple registrations in one step:

• Issuance of a VAT number and tax code for the S.n.c.
• Registration with the local Chamber of Commerce
• Enrolment in the Business Register
• Opening of a Social Security (INPS) position
• Opening of an insurance position (INAIL) if you hire staff or collaborators
• Filing a start-of-business notice with the REA (Economic and Administrative Index)

Other key requirements include:

• Setting up a certified email address (PEC)
• Activating a digital signature
• Activating your digital identity (SPID)
• Setting up electronic invoicing

And finally–there’s the business account. Let’s clarify that next.

Business account for an S.n.c.

Legally, an S.n.c. is not required to open a business bank account–as long as annual revenue stays below €400,000. But even if it’s not mandatory, it’s highly recommended to have a dedicated business account. It helps keep your bookkeeping clear and ensures your personal and business finances stay separate.

Once revenue exceeds €400,000, however, having a dedicated business account becomes a legal obligation–so why not be ready from the start?

Today, there are fully digital business accounts–like Vivid Money–that are perfectly suited for partnerships like the S.n.c.:

• Business account with a local Italian IBAN
• Plans starting from €0/month
• SEPA and SWIFT transfers
• Physical and virtual business cards with cashback
• Interest on business balances
• Treasury features to invest part of your funds on the financial markets

Get your finances set up from day one. Open your Vivid business account and benefit from features built for modern partnerships–no monthly fees, instant transfers, and smart tools to help your business grow.

Setup costs and annual fees

Opening an S.n.c. generally comes with lower startup costs than forming a limited liability company.

Startup costs

Between notary fees, stamp duties, Business Register fees, and digital tools (like a certified email address, digital signature, and invoicing software)–plus the cost of hiring an accountant–the average initial investment ranges from €1,500 to €2,500.

Variable annual costs

The main variable is ongoing operational costs. Each year, an S.n.c. must typically pay:

• Chamber of Commerce annual fee: around €120–€150
• Accountant fees: from €1,500 to €3,000, depending on business volume
• Stamp duties and fees for maintaining company books

These costs increase with the number of partners, employees, and overall business activity.

S.n.c. partnerships with revenue under €400,000 (for service providers) or under €700,000 (for all others) may qualify for the simplified accounting regime, reducing administrative overhead.

Taxes

S.n.c. partnerships operate under the transparency tax regime: the company itself is not taxed, but each partner is taxed individually based on their share of the profits, using progressive IRPEF income tax rates.

Tip: Even if profits aren’t actually distributed, partners are taxed on the profits “on paper”–as declared in the books.

In addition to IRPEF, S.n.c. companies must also pay IRAP (Regional Tax on Productive Activities), with an average rate of around 3.9%, depending slightly on the region.

Social security contributions

Each working partner must register with the INPS “Artisans and Merchants” scheme and pay a mandatory minimum contribution, split into four instalments per year, plus a variable percentage on profits.

• The fixed amount is updated annually by INPS
• Any income above the minimum threshold is taxed at a variable rate, also updated yearly

These contributions apply to all working partners, including working-only partners (soci d’opera).

Closing an S.n.c.

An S.n.c. can be dissolved for various reasons, including:

• The completion of its corporate purpose
• Disagreements between partners
• The lack of at least two partners
• Insolvency or bankruptcy

If there are no outstanding debts, the business can be closed by requesting removal from the Business Register, and the remaining assets are distributed among the partners. The Tax Agency, INPS, and INAIL are notified through the Single Communication, just as during setup.

If there are debts, a liquidation process must be initiated. A liquidator is appointed–either a professional or a partner–who is responsible for:

• Collecting outstanding receivables
• Settling all debts
• Distributing any remaining assets proportionally to the partners’ shares
• Requesting cancellation from the Business Register

Partner exit, death, and succession

If a partner wishes to leave the company, the rules are defined in the founding agreement or the company statute. If no such rules exist, the exit requires consent from the other partners or must be based on legitimate grounds.

In the event of a partner’s death, their share may be passed on to heirs, but only if this is permitted in the partnership agreement or with approval from the remaining partners.

Otherwise, the company may either dissolve or proceed with the liquidation of the deceased partner’s share.

Advantages and disadvantages of an S.n.c.

The main advantages of an S.n.c. are its low startup, operating, and administrative costs, along with simplified bookkeeping requirements. In most cases, these businesses qualify for simplified accounting, though as revenues grow, switching to standard accounting may become necessary. At that point, it might be more practical to transition to a more structured business type–like an S.r.l.

The biggest disadvantage is the lack of asset protection. If the business runs into trouble or defaults, partners risk personal bankruptcy. Another downside is that all partners must register with the INPS “Artisans and Merchants” scheme–which may be inconvenient in some cases. For example, non-working shareholders in an S.r.l., or limited partners in an S.a.s., are not subject to this requirement.

When is an S.n.c. the right choice?

An S.n.c. can be a good legal structure when:

• You want to quickly launch a business with two or more people
• The business model is low risk
• The partners know and trust each other

The S.n.c. is well-suited for traditional professions, craft businesses, or small local shops.

However, if the business has strong growth potential, plans for external investment, involves significant financial risk, or includes silent partners, an S.r.l. might offer far greater asset protection.