People like to be together to pursue a common goal. It can be a car trip with which to share fuel costs or to build or manage a condominium together. There are families who set up businesses together to offer a service and earn money. In general, we speak of a company when two or more people join together to undertake an entrepreneurial activity, to which each shareholder will make his own contribution (whether it be goods in kind, work or money) and whose profits will be shared.
Simple society is a popular form of society precisely because of its elementary form , and is suitable for non-commercial activities. In this article we try to better understand what a simple company is and how the process to set it up works.
Index
- What is a simple company?
- What are the practices for opening a simple company?
- How much does it cost to set up a simple company?
- How does taxation work for a simple company?
- When does a simple company dissolve?
- Conclusion: advantages and disadvantages of a simple society
What is a simple company?
In the Italian system, the simple society (ss) is part of partnerships and is the most basic type of society, as the word itself says. The simple company is regulated by articles 2251 – 2290 of the Civil Code , which generally concerns personal companies.
The simple company consists of a non-commercial gainful activity and is constituted by the commitment by the shareholders to carry out this activity together. With this social contract (which represents the articles of association ), the shareholder undertakes to provide the company with goods and services necessary for the exercise of the activity. It can be money, but also real estate and furniture, or even work (work partner). The contract is drawn up by notarial deed or by authenticated private writing and includes the general information of the company, namely:
- The shareholders general;
- the corporate purpose , or the specification of which activities will be carried out by the company;
- the articles of association , which specify the general rules for the functioning of the company. Furthermore, the corporate offices are defined in the statute;
- the company name and corporate form , as well as the registered office of the ss;
- nature and amount of contributions (specifying whether it is labor, capital or real estate);
- the manner in which they are distributed profits , as well as
- the duration of the company itself.
As we said, the simple society is suitable for non-commercial activities and not aimed at speculation: for this reason it is often used when it comes to agricultural businesses, but also for leisure activities or to manage real estate assets.
In this type of company, the partners have an unlimited and joint and several liability , which means that they are also personally responsible for the debts contracted. Therefore, in the event of company debts, the personal assets of all the shareholders will also be liable. However, it is good to remember that unlike other corporate forms, the simple company is not subject to bankruptcy.
What are the practices for opening a simple company?
The ss must be registered in the commercial register, in the special section. The registration function is purely personal and has no legal effects. Furthermore, a notarial deed or authenticated private agreement is required. Finally, the company must be provided with a current account in its name, where the money will be paid by the members.
NB
A minimum capital is not required for the simple company.
How much does it cost to set up a simple company?
The costs for opening an SS are relatively low, it is stamp duty, registration tax and for the Chamber of Commerce (for a total of around 700 euros), in addition to the costs for the accountant.
How does taxation work for a simple company?
The company must file the tax return in order to determine operating income and the tax treatment is similar to that of natural persons.
As far as income is concerned, it is distributed among the shareholders in proportion to the company shares.
When does a simple company dissolve?
There are several reasons and causes that lead to the dissolution of simple society, including:
- expiry of the term in the absence of an extension;
- unanimous will of the members;
- achievement of the social object or impossibility of reaching it;
- social plurality (for example, only one partner remains) for more than six months.
Conclusion: advantages and disadvantages of a simple society
Simple society, like all other forms of society, has advantages and disadvantages. Among the former we can include the lean procedure to set it up, the fact that it is not subject to bankruptcy, and that the income of the shareholders is proportional to the participation fees. In addition to the establishment, management is also particularly simple. Finally, no minimum capital is required.
Among the disadvantages , however, the first is certainly the liability of the members (unlimited and joint and several, as already mentioned). This obviously entails a risk for the shareholders, who potentially endanger their personal capital (both movable and immovable property), in addition to the fact that the simple company does not lend itself to commercial activities.
