Procedure of Formation of Company.Find out how to open a company quickly and easily. Let’s see what types exist, how to set up the most suitable one for your business and what the opening and management costs are.
The idea of forming a company is conceived either by a person or by a group of persons known as promoters. The investors are so widely scattered that somebody has to take the initiative of bringing them together for participating in an industrial venture. The promoters take a lead for bringing men. money, materials and machinery together for establishing an industrial enterprise.
Procedure of Formation of Company
Types of corporations and distinctions
There are many variants of corporations with a number of characteristics to consider. Let’s see what changes for each type and the differences:
- the limited liability company is the most widespread and flexible type of corporation to date. It can be established with a minimum capital of €1 and the members participate with shares that can have a different value for each member
- the joint-stock company is suitable for large companies and has a minimum capital of €50,000. With this type, members can participate with shares with a fixed value that is the same for everyone
- the limited partnership by shares is a particular variant of the joint stock company which allows for two categories of partners, those who can administer the company and who in the event of errors must pay damages (general partners) and those who cannot administer and who are liable for debts only within the limits of their participation (limited partners)
The alternative is to set up the company directly. This is the most followed and fastest option. Let’s see together what all the necessary steps are .
- Creation of constituent documents
The first step is the creation of the articles of association and the deed of incorporation . The deed of incorporation contains data on the shareholders and on the company (e.g. the name of the SRL). The statute, on the other hand, regulates the corporate functioning (e.g. it describes the powers of the directors, sole director or board of directors ).
- Capital payment
After creating the constitutional documents, the partners must pay up the share capital . Members are free to choose how much to pay, however, it is always advisable to cover start-up costs (e.g. for the purchase of the necessary machinery). Payment can be made by bank transfer or, in some cases, by cashier’s check.
- Constitution and stipulation by the notary
The next step is to go to the notary for the constitution. From 14 December 2021 it is no longer necessary to physically go to the notary but it is possible to set up the company with the notary online via webcam. All members and directors of the company must be present or connected by videoconference (in this case they must also have an active digital signature). The notary will identify those present, verify the payment of the capital and formalize the establishment of the company.
- Initial Tax Compliance
The company must have its own tax code and VAT number . These codes are assigned by the revenue agency and generally match. These initial tax compliances are often made by the accountant who follows the company’s accounts.
- Registration in the commercial register
Once the tax code and VAT number have been obtained, the company is registered in the register of companies . This register is an electronic database that contains information on Italian companies (e.g. registered office and PEC). The registration is carried out by the notary and with this fulfilment, the company becomes to all intents and purposes an independent subject with respect to the individual shareholders (it acquires legal personality).
- Communication of start of activity
In order to start the business, there are also a series of subsequent administrative and tax obligations to be done. It is necessary to make a communication of the start of the activity which provides for the sending of some telematic declarations to the competent bodies. The communication varies according to the activity carried out, for example, construction companies must present a specific certified report (SCIA) .
STAGES OF FORMATIONS
Following are the stages of formation of company.
- Promotion stage
- Idea
- Verification
- Resources
- Plan
- Incorporation /Registration Stage
- Name
- License
- Preparation of legal documents
> Preparation. legal documents
Memorandum of Association
Articles of Association
- Fee
- Other documents
- Submission of documents
- Verification of documents
- Certificate of incorporation.
- Capital Stage/ Subscription Stage
- Contract with underwriter
- Contract with bankers
- Issue of prospectus.
- Issue of shares
- Commencement stage
- Shares (Minimum subscription)
- Payment of shares
- Declaration
- Certificate of commencement of business
- Promoting stages
The first stage of formation of company Is called promotion stage.
Following steps are taken promotion stage.
- Discovery of an idea
The first stage in company promotion is the Conception of a new idea. A person visualizes that there are opportunities for a particular type of business and It can be profitably run. The idea may be to exploit a new area of natural resources or more profitable enters in an existing line of business. He develops the idea with the help of technical experts in that field. If they are convinced that profitable avenues arc available in that line of business then the idea is taken forward for more exhaustive analysis.
- Detailed Investigations
At the second stage various factors relating to that business are studied from a practical point of view The promoters will estimate total demand for the product. There may be certain concerns already in that.
