(S.r.l. or Srl) is a type of legal corporate entity in

Italy Italy, officially the Italian Republic, is a country in Southern Europe, Southern and Western Europe, Western Europe. It consists of Italian Peninsula, a peninsula that extends into the Mediterranean Sea, with the Alps on its northern land b ...

, which literally means (but is not entirely equal to) '

limited liability company A limited liability company (LLC) is the United States-specific form of a private limited company. It is a business structure that can combine the pass-through taxation of a partnership or sole proprietorship with the limited liability of ...

'. It has a similar form to (S.s.d a r.l.) for amateur sports-related companies and their corresponding regulations: article 90 of the Italian Law No.289 of 2002. Differing from (S.p.A.), S.r.l. may not issue shares that have

par value In finance and accounting, par value means stated value or face value of a financial instrument. Expressions derived from this term include at par (at the par value), over par (over par value) and under par (under par value). Bonds A bond selli ...

, but only the quota () or units of the

share capital A corporation's share capital, commonly referred to as capital stock in the United States, is the portion of a corporation's equity that has been derived by the issue of shares in the corporation to a shareholder, usually for cash. ''Share ...

. Moreover, the articles of association of S.r.l. allowed different allocations of profits and assets, which was more comparable to a

limited partnership A limited partnership (LP) is a type of partnership with general partners, who have a right to manage the business, and limited partners, who have no right to manage the business but have only limited liability for its debts. Limited partnership ...

. A fourth form of corporate entity, (S.c.r.l. or S.c. a r.l.), was seen in the

cooperative A cooperative (also known as co-operative, coöperative, co-op, or coop) is "an autonomy, autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned a ...

s of Italy.

History

The was introduced into the Italian legal system with the

Civil Code A civil code is a codification of private law relating to property law, property, family law, family, and law of obligations, obligations. A jurisdiction that has a civil code generally also has a code of civil procedure. In some jurisdiction ...

of 1942—previously, there was a joint-stock company by shares, which did not differ much from other joint-stock companies. The aim was to create a legal form that stood between partnerships and joint-stock companies. However, this goal was not fully achieved, as the lacked a proper autonomous discipline, a gap that was addressed by referring to that of the . Furthermore, the financial structure was quite limited, making the prone to the phenomenon of nominal undercapitalization. This was because the issuance of bonds was prohibited, and there was a ban on issuing special shares (all shares were equal and granted equal rights). The phenomenon of the so-called "financing by the partner" intensified, involving a loan from a partner to the company. This loan did not result in a capital increase and led the partner to play the dual role of a shareholder and a creditor. The negative effect was that what could have been a capital increase benefiting creditors (e.g., in the event of the

insolvency In accounting, insolvency is the state of being unable to pay the debts, by a person or company ( debtor), at maturity; those in a state of insolvency are said to be ''insolvent''. There are two forms: cash-flow insolvency and balance-sheet i ...

of the company) instead became a concurrent debt with the claims of creditors. The corporate form of the underwent significant innovation through the corporate law reform of 2003. Now, the , equipped with its autonomous discipline, appears as an intermediate and "hybrid" model between the and partnerships. Some elements, such as the complete waiver of the principle of patrimonial liability under Art. 2740 of the Civil Code, bring it closer to the . Simultaneously, other factors, such as organizational flexibility or the personality of the shares, are typical of partnerships. This raises an interpretative issue regarding which legal framework to use to fill any gaps in the model.

References

{{DEFAULTSORT:Societa a Responsabilità Limitata Legal entities Types of business entity