The limited liability company is the form in which a business stops being the same thing as the person running it. The assets of the company and those of its shareholders stay separate, and that separation is why so many Italian small and medium-sized businesses pick the S.r.l. once they start to grow.
To open an S.r.l. you need at least one shareholder, share capital of 10,000 euros in the standard version, a notary to receive the deed of incorporation, and registration with the Business Register. The requirements for an S.r.l. are few and the steps are precise. This guide lines them up: what the abbreviation means, how to open an S.r.l. step by step, what it costs, and how the company works once it is up and running.
The key points at a glance:
- What it is: the SRL is a capital company with its own legal personality, in which shareholders are liable only for what they have contributed.
- Capital: at least 10,000 euros for the standard S.r.l., from 1 euro for the S.r.l.s., which however has to be paid in full.
- How it is opened: deed of incorporation before a notary, a business account for the payment, a VAT number and registration with the Business Register.
- What it costs: the main item is the notary, from 1,600 to 2,000 euros, plus chamber-of-commerce fees, taxes and the accountant’s fee.
- Minimum turnover: there is none, no rule sets a revenue threshold.
S.r.l.: what it is, what it means and how it works
The abbreviation stands for società a responsabilità limitata and is written both as SRL and as S.r.l. What it means in practice is spelled out by the phrase itself: the liability of the shareholders towards creditors stops at the share they have subscribed. That is the characteristic that separates this company from a sole proprietorship or a partnership, where personal assets and business assets remain one and the same.
The limited liability company is a capital company and a legal person, that is, an entity distinct and separate from the shareholders (individuals) who form part of it. This means that the S.r.l. is also an independent legal subject and has assets separate from those of the shareholders.
That is the key point of the S.r.l.: in the event of bankruptcy, the shareholder loses only what was invested as share capital and runs no risk on personal assets. The S.r.l. is said to have perfect asset separation.
Inside the company the capital is divided into quotas rather than shares, and each quota measures the weight a shareholder carries in decisions and in profits. Quotas are shaped by the statute, with particular voting rights, staggered entries or clauses on transfers. These characteristics are what set the S.r.l. apart from the S.p.A., which is designed for large structures and for raising capital on the market.
S.r.l. or S.r.l.s.?
In Italy there are several types of S.r.l.: the standard S.r.l., the S.r.l.s. (simplified), and until a few years ago the reduced-capital S.r.l., which is no longer available today. The main difference between the variants lies in the minimum share capital and the formalities required.
The standard S.r.l. requires at least 10,000 euros of share capital, and at the time of opening you can pay in just 25% of it if there is more than one shareholder, with the rest over the years. The S.r.l.s., on the other hand, was created for those who prefer to start with few resources and leaner procedures, and it can be set up with share capital of even 1 euro. But it must be paid in full immediately.
The S.r.l.s. was created to lower entry barriers. It is the ideal form for those who want to start independent activities or start-ups, test a business without tying up capital, and keep costs to a minimum. The reduced capital, however, can make access to bank credit difficult. Governance is also less flexible: you cannot freely change the statute.
A standard S.r.l., by contrast, suits those who already have investors, are looking for more structured governance, want to grow, or want easier access to financing.
| Feature | Standard S.r.l. | S.r.l.s. |
|---|---|---|
| Minimum share capital | 10,000 euros | 1 euro |
| Payment at setup | At least 25% with more than one shareholder | In full |
| Contributions | In cash or in kind | In cash only |
| Statute | Customisable | Standard template |
How to set up an S.r.l.: every step
To open an S.r.l. you need at least one shareholder, an individual (of legal age) but also a legal person (other companies). If there is only one founder, this is called a single-member S.r.l. or sole-shareholder S.r.l., and in practical terms almost nothing changes.
If there is more than one shareholder, it is mandatory to appoint an administrator, who is responsible for day-to-day management and is the point of reference for all tax and legal obligations, and who can be one of the shareholders or an external figure.
Where they are required, you must also identify the auditing bodies, which can be a single professional (sole auditor, statutory auditor) or a group (board of auditors). Article 2477 of the civil code triggers the obligation once, for two consecutive financial years, at least one of these limits is exceeded:
The obligation falls away when none of the three limits is exceeded for three consecutive financial years.
One shareholder is enough, an individual or another company. With more than one, an administrator has to be appointed, either one of them or an external figure.
You need the shareholders’ identity documents, the deed of incorporation and the statute, plus a PEC address and a digital signature. Minimum capital for the standard S.r.l. is 10,000 euros.
The account is opened before signing, because it has to be ready to receive the share capital, ideally with an Italian IBAN.
The notary receives the deed of incorporation and certifies the payment of the capital. Since 2021 the signature can also take place by video conference.
Within ten days the accountant applies for the VAT number, notifies the Chamber of Commerce of the company’s formation, and registers it with the Business Register.
Before the business starts trading, the certified notice is submitted online to the SUAP desk of the municipality where the company is based.
Documents and requirements
The documents required vary depending on the case, but the ones always needed are:
You also need a certified email account (PEC), a digital signature for all shareholders, electronic invoicing software, and any SPID credentials.
The share capital
When incorporating a standard S.r.l., you must contribute a minimum share capital of 10,000 euros. The amount can be paid in full immediately or just 25%, if there is more than one shareholder. In the case of the S.r.l.s., 1 euro of capital is enough, but it must be paid in full.
The capital can be contributed in cash or in kind, in the form of materials, receivables, or businesses. If the share capital is contributed in assets other than cash, a valuation report is usually required to confirm its actual value.
Bank account for an S.r.l.
To open an S.r.l., the company must have a dedicated business account. The account must already be open and ready to receive the instant transfer (in the case of a cash contribution), ideally with an Italian IBAN and plenty of features (payment cards, interest on balances, tools for managing finances, loans, and so on).
Choosing the account for your S.r.l. carefully means selecting a reliable partner, managing your treasury at its best, keeping control over spending, accessing savings or investment products, and more.
Incorporation and registration of the company
The shareholders are in place, and so is the administrator. The share capital and the statute are ready: it is time to turn to a notary. The professional prepares the deed of incorporation and certifies the payment of the initial capital (instant transfer or banker’s draft).
After the shareholders sign the notarial deed, the accountant appointed by the new S.r.l. has ten days to:
Before starting any activity, the S.r.l. must also submit online the notice of commencement of activity called SCIA (Segnalazione Certificata di Inizio Attività, certified notice of commencement of activity) to the SUAP desk of the municipality where it is based.
Opening an S.r.l. online
Since 2021, with Legislative Decree no. 183/2021, it is also possible to open an S.r.l. or an S.r.l.s. online, through a simplified procedure. The deed of incorporation, where contributions are in cash and the registered office is in Italy, can be drawn up as a digital public deed.
The notary can collect the parties’ signatures via video conference, thanks to the platform provided by the National Notary Council (Consiglio Nazionale del Notariato).
How to close an S.r.l.
Closing an S.r.l. requires a liquidation procedure: the assets are sold, the debts are paid, and any remaining funds are distributed among the shareholders. The process ends with removal from the Business Register and a cost that can range from 1,500 to 2,000 euros, plus the accountant’s fees and the closing charges.
The route in short:
- One shareholder is enough; an administrator is needed once there is more than one.
- The business account is opened before signing, because that is where the capital lands.
- The notary receives the deed of incorporation, since 2021 by video conference too.
- Within ten days come the VAT number, the Chamber of Commerce and the Business Register.
- The SCIA to the SUAP desk comes before trading starts.
How profits are withdrawn
A shareholder in an S.r.l. cannot withdraw a sum from the company account at will. The only way is the distribution of profit, or dividend. The distribution follows a precise procedure:
In the case of prior losses, you must cover the gap and set aside 5% as a legal reserve, up to 20% of the capital.
Administrator’s remuneration
Another way to withdraw profits from the company is through the administrator’s remuneration. The administrator of the S.r.l. can be paid remuneration set by the statute or by the shareholders’ meeting. It can be paid on a fixed, variable, or mixed basis, and is normally paid on a monthly or periodic basis through a payslip.
Transfer of shares, capital increase, and changes to the statute
If a shareholder wants to transfer their shares, a notarial deed is needed, or the involvement of an accountant in specific cases. The value of the shares is often established through a valuation report. Bringing in new shareholders requires, in most cases, a capital increase with a resolution of the shareholders’ meeting, a notarial deed, and minutes.
Changes to the statute to alter the corporate purpose, governance rules, shares, or administrators’ powers always require an official amendment of the statute, carried out with the involvement of the notary and subsequent registration.
How much does it cost to open an S.r.l.?
How much it costs to set up an SRL comes down almost entirely to two items: the notary at the start and the accountant every year. The rest are fixed, predictable amounts, much the same for every company. The table below gathers the expenses that recur during setup and over the following twelve months, so the sum can be done before signing rather than after.
| Cost item | When | Indicative amount |
|---|---|---|
| Notary for the deed of incorporation | At setup | From 1,600 to 2,000 euros |
| Chamber-of-commerce fees | At setup and every year | From 120 to 200 euros |
| Company-register tax | Every year | About 300 euros |
| Filing of the financial statements | Every year | About 40 euros |
| Accountant | Every month | From 300 euros |
Setup costs of an S.r.l.
Starting up an S.r.l. involves on average a notary fee of between 1,600 and 2,000 euros, to which are added the chamber-of-commerce fees (about 120 to 200 euros), the company-register tax (about 300 euros a year), the costs of handling the initial paperwork, and the charges for the filing of the financial statements (about 40 euros). Between stamp duties and other small expenses, the annual total for the bureaucratic part alone comes to between 500 and 700 euros.
Running costs of an S.r.l.
The main fixed cost of the S.r.l. is accounting. The accountant is an essential figure for a capital company, because they handle ordinary accounting, tax returns, financial statements, and mandatory obligations. A professional charges on average 300 euros a month, but the figure can rise in proportion to the number of employees and the increase in operations.
Then there are the banking costs. Traditional banks charge a very high monthly fee for SMEs; if you choose an online business account, the costs can be considerably lower (and also claimable).
Finally, you have to consider the business expenses, which clearly vary from case to case: salaries, rent and utilities, software and licences, company vehicles, raw materials, and more.
Worth remembering on costs:
- The largest item is a single one and falls at setup: the notary.
- Chamber-of-commerce fees, the company-register tax and the filing of the accounts come back every year.
- The accountant is the fixed cost that weighs most over time.
- Account charges vary a great deal depending on the solution chosen.
How does an S.r.l. work after it opens?
Once the deed is signed and the VAT number is through, the S.r.l. starts walking on its own. How an S.r.l. works day to day comes down to three things: who owns the quotas, who takes the decisions, and in which books the company records its numbers. Knowing what kind of company the S.r.l. is on paper helps little without those three layers, which stay separate for the whole life of the business.
Shareholders, quotas and liability
The capital of the S.r.l. is divided into quotas, and a quota measures three things at once: the weight of the vote at the shareholders’ meeting, the share of profit due, and the amount for which the shareholder is liable. Once a quota has been subscribed and paid in, the commitment towards creditors is exhausted, because it is the company’s assets that answer for the company’s obligations.
Shareholders who do not administer still keep a power of control. Article 2476 of the civil code gives them the right to receive news on how the business is going and to consult the books and the documents relating to the administration, including through a professional of their choice.
The administrator and the running of the company
The administrator is the figure who signs for the company: they handle day-to-day management, keep up relations with suppliers and payment institutions, and answer for tax obligations. It can be a shareholder or an external person, a sole administrator or part of a board, and each one’s powers are written into the statute.
The decisions that carry weight stay with the shareholders: the financial statements, the profits, the statute, the entry of new shareholders. The same article 2476 establishes that administrators are liable towards the company for damages arising from failure to observe the duties imposed by law or by the deed of incorporation, which is why delegated powers are written down precisely.
Accounting regime and obligations
The S.r.l. is always required to keep ordinary accounting, with no exceptions: it cannot adopt simplified regimes such as the flat-rate regime (regime forfettario, for sole proprietorships) or the simplified regime (for partnerships that meet certain limits). Ordinary accounting requires keeping the general journal, inventories, and VAT registers, and drawing up the annual financial statements.
Italian law, however, distinguishes between different forms of financial statements. Micro-enterprises can draw up very simplified ones: those are the companies that, for two consecutive financial years, do not exceed two of these three limits, namely 220,000 euros in assets, 440,000 euros in revenue and 5 employees on average during the year.
Abbreviated financial statements follow the same logic with higher limits: 5.5 million euros in assets, 11 million in revenue and 50 employees, again on the two-out-of-three rule. Once a company passes that threshold too, full ordinary financial statements become mandatory.
The calendar, by contrast, is the same for everyone. Article 2478-bis of the civil code sets the presentation of the financial statements to the shareholders within one hundred and twenty days of the end of the financial year, and the filing of the approved copy with the Business Register within thirty days of the decision approving it. In between run electronic invoicing, VAT settlements and the mandatory books, that is, the work the accountant spreads across the whole year.
Minimum turnover for an S.r.l.: is there a threshold?
There is no minimum turnover for an SRL. No rule sets a revenue threshold for incorporating the company, for keeping it on the Business Register, or for continuing to run it, and a financial year can close with zero revenue and still be perfectly in order.
The threshold, if anything, is economic rather than legal. The fixed costs of the structure stay the same at any level of revenue, so the form gives its best when the volume of business is steady. Below that level, lighter arrangements such as the sole proprietorship remain workable.
S.r.l. taxation
The taxation applied to S.r.l.s affects both the company and the shareholder (individual). The company pays a fixed rate of 24% IRES (Imposta sul reddito delle società, corporate income tax) on taxable income, to which is added IRAP (Imposta Regionale sulle Attività Produttive, regional tax on productive activities), which starts at 3.9% and rises, depending on the region and the activity.
The shareholder who withdraws profits (dividends) is taxed further: a withholding tax of 26% is applied to the amount received. The company must pay this withholding tax via the F24 form, and the shareholder receives a Single Certification (Cupe).
The administrator who carries out actual activity is taxed differently. In this case the S.r.l. is required to apply:
Deductible costs and claimable expenses
The S.r.l. can claim all costs arising from the business to reduce its taxable income for IRES purposes, for example:
The administrator’s remuneration is also deductible for IRES purposes, and therefore reduces the company’s taxable base. Not all expenses are 100% claimable; some are subject to specific limits or conditions.
Advantages and disadvantages of an S.r.l.
The S.r.l. is a legal form that offers quite a few advantages to small and medium-sized businesses:
Profits can be reinvested or distributed under transparent rules, and each shareholder is free to transfer their shares and to invest again whenever they want.
And the downsides? First of all, the administrative and running costs are high compared to other models. And then there is plenty of bureaucracy: every activity must be documented, the financial statements must be drawn up and filed annually, and there is the obligation of ordinary accounting and explanatory notes.
You need the constant support of several professionals, because transparency towards the tax authorities and creditors is total.
The risks of an S.r.l.
The shareholders of an S.r.l. risk only the capital they have contributed, except where personal guarantees have been given to the bank or legal obligations have been breached.
Administrators, on the other hand, have a much broader liability: they must manage every aspect of the company with diligence and are answerable to the shareholders, the creditors, the tax authorities, and even in criminal terms in the event of tax or management offences.
An account for your new company
Once your company is set up, open the Vivid business account fully online. Sub-accounts with their own IBAN keep capital, taxes and day-to-day spending apart from day one.
FAQ
What is the difference between an S.r.l. and an S.r.l.s.?
The main difference between an S.r.l. and an S.r.l.s. lies in costs, governance, and access to credit. The S.r.l.s. requires fewer resources at the start, but it allows less room for customisation and may have more difficulty obtaining significant financing. A standard S.r.l. is more expensive to open, but from the point of view of growth and management it is more versatile.
Which should I choose, an S.r.l. or a sole proprietorship?
The sole proprietorship is the simplest form for starting a new business. The setup costs are low and management is largely simplified. The disadvantage, however, is that the owner is liable with all their present and future assets for the debts incurred by the business. The S.r.l., by contrast, separates personal assets from business assets and offers protection that makes the difference for those who want to do business. From a tax point of view, the S.r.l. allows optimised tax planning for SMEs, while the sole proprietorship can access the flat-rate regime under certain requirements but becomes uneconomical above a certain turnover.
What is the difference between an S.r.l. and an S.n.c.?
The S.r.l. is a capital company, with its own legal personality and perfect asset separation. The S.n.c. (società in nome collettivo, general partnership) is a partnership where each partner is liable without limit and jointly for the company’s obligations. To open an S.r.l. you must contribute a minimum capital, whereas an S.n.c. does not require one. The S.r.l. is subject to IRES and IRAP taxation, while the S.n.c. pays IRAP and follows the transparency regime, so it is the partners who pay IRPEF on their share of profit. The S.r.l. is required to file its financial statements every year with the Business Register, while the S.n.c. is a private company and has fewer accounting obligations. In addition, the S.r.l. has the obligation to hold a business bank account, while the S.n.c. is required to have a dedicated account only for turnover above 400,000 euros.
What is a real estate S.r.l. (S.r.l. immobiliare)?
A real estate S.r.l. is a company that operates in the property sector by buying, managing, renting, or selling real estate. It often offers more structured management of assets and makes it possible to separate personal risks from those tied to property. This corporate form has higher costs than managing property as a private individual, but it can be worthwhile when the properties are numerous or when the activity is ongoing.
How can I pay less tax with an S.r.l.?
S.r.l.s can adopt tax-planning strategies, such as creating a holding company to lower the tax burden, accessing deductions and tax credits more easily, optimising the distribution of dividends, and structuring generational succession and asset growth efficiently. Various tools allow those who invest in capital goods to access bonuses, incentives, and tax credits, but you should always consult an up-to-date accountant.
Is there a minimum turnover for an S.r.l.?
No, Italian law does not provide for any mandatory minimum turnover to set up, maintain, or continue running an S.r.l. Working without turnover is theoretically possible, and no law requires a threshold of annual revenue for the company to survive.
What happens if the S.r.l. closes at a loss?
If a limited liability company closes at a loss, the shareholders are only at risk for the capital subscribed and the sums paid in. If debts emerge during liquidation and profits have been distributed to the shareholders, creditors can pursue those sums. Otherwise, there is no personal risk for any shareholder.
This article is general information only and is not legal, tax or financial advice. Rules, prices and conditions can change at any time, and no claim to completeness or accuracy is made. Please check the current terms with the provider in question, or ask a professional. Vivid Money S.A. is an electronic money institution supervised by the CSSF and is not a bank; client funds are held separately from the company’s own assets. Brands and product names mentioned belong to their respective owners. Interest and Crypto Accounts and investing are provided by Vivid Money B.V. and are investment products: investments carry risk, returns are variable and not guaranteed, and the value of an investment can rise and fall.
