5 October, 2017

The share capital represents the value of the funds and the assets (the “contributions”) conferred by the shareholders, as risk capital, at the time of the incorporation of a limited liability company. It is, usually, divided into equal shares that are allocated to the shareholders in proportion to the amount of capital subscribed and paid.

Furthermore, the share capital represents a minimum guarantee for the company’s creditors for the debts the company has with them.

Under Italian law, private limited liability companies do not have a minimum share capital requirement anymore (only corporations do). Therefore, the share capital of a company can be any amount starting from 1 Euro.

As for the payment of the share capital, there are different scenarios.

If the initial share capital amount is lower than 10.000 Euros and / or there is only one shareholder, it must be entirely paid before the incorporation deed is executed in front of the Notary public.

If, instead, the share capital is equal to, or higher than, 10.000 Euros and the shareholders are more than one, only 25% of it should be paid before the execution of the incorporation deed.

It is useful to know that, under Italian law, payments of at least 3.000 Euros cannot be made in cash. Therefore, if the share capital, or the 25% of the share capital, exceeds 3.000 Euros, the payment must be done through a bank transfer. Since it must be paid before executing the incorporation deed, usually the notary has a special bank account dedicated to these situations. Basically, the payment will be done on the bank account of the Notary who will hold the amount in escrow until the company is incorporated.