Joint-stock companies: what they are, types and characteristics

Corporations are legal entities created to conduct business and divide ownership among investors.
In these companies, capital is the core of the investment and is divided into shares that represent ownership of the company.
Opening a company is a very important step and before acting you need to evaluate all the opportunities and consequences of your choice.
For this reason, knowing the difference between a joint-stock company and a partnership is central to taking the right business direction.
But the joint-stock company is not just one type: let's discover together what the existing types are and the basic characteristics to be aware of.
Joint-stock companies, the complete guide What are joint-stock companies: definition and characteristics The advantages of opening a joint-stock company What are joint-stock companies: the types to know Joint-stock companies (Spa) Limited partnerships by shares (Sapa) Limited liability company (Srl) Simplified limited liability company (Srls) Difference between capital companies and partnerships How a capital company is formed Capital companies: liquidation and dissolution What are capital companies: definition and characteristics Companies of capital are entities that have legal personality and perfect financial autonomy.
By definition, we could say that: A joint stock company is a legal form of business organization in which the share capital is divided into shares, which represent the ownership of investors, called shareholders.
This means that people can buy shares to become owners of the company.
The liability of the shareholders is generally limited to the amount invested in the shares, and the management of the company is entrusted to directors appointed by the shareholders or by decision-making bodies provided for by law or the company statutes.
In other words, these companies have a responsibility of their own which makes the shareholders less subject to liabilities affecting the company.
Capital companies are distinguished from partnerships precisely by this characteristic.
In addition to having their own legal personality, shareholders are not personally liable in the event of financial or legal problems of the company.
This is because it is the company, in the eyes of the State, that has obligations and rights that are distinct from its shareholders.
LLCs are common tools for medium-sized and large businesses or those aiming to raise capital from many investors.
read also How to move from a partnership to a capital company The advantages of opening a capital company For this type of company, as for all others, there are pros and cons.
The pros of joint-stock companies are: the limitation of business risk, i.e.
the fact that the company's assets are completely independent from the shareholders' assets; the decision-making power of the shareholders, who do not administer the company but can express their opinion in the meeting, where the majority decides; decisions are collegial and are taken by majority at the meeting, with voting rights based on quotas (or shares).
The cons of joint-stock companies are the medium-high opening and management costs.
Among these, in fact, we can include: incorporation costs, with notary fees first and foremost (minimum 600-700 euros) and registration fees (which vary depending on the territory and the type of company); legal and tax consultancy to draw up the articles of association and verify compliance with local regulations, which can even cost up to more than 2,000 euros; registration in the Company Register and related taxes, also variable; the opening of the company bank account, which in some cases involves a high commission cost.
Finally, the annual fee for various operations must be considered, such as bookkeeping and tax returns, which, also based on the share capital, can make the economic commitment to sustainability skyrocket.
And then we must remember that in the case of LLCs, at least 10,000 euros of capital are needed to open, while for spas it reaches 50,000 euros.
Still important sums.
Now let's understand together what the various types of joint-stock companies are.
read also How to open a company in Italy? Requirements, obligations and costs.
The quick guide What are joint-stock companies: the types you need to know There is not just one type of joint-stock company.
All forms are governed by the Italian Civil Code and can be grouped into 4 types: Joint-stock company (Spa) Limited partnership by shares (Sapa) Limited liability company (Srl) Simplified limited liability company (Srls) Joint-stock company ( Spa) The Spa is a joint-stock company in which the participation shares are represented, in fact, by shares, or transferable securities.
The share capital is divided into a number of shares, of which the members are the owners for as long as they are in possession.
Owning shares therefore allows you to: have the right to dividends; the distribution of assets in the event of closure; participation in the shareholders' meeting.
In the joint stock company, the members contribute capital expressed in shares.
It means that the company's capital is made up of many shares.
For example: if each share is worth 1,000 euros and you contribute 10,000 euros, it means that you own 10 shares in the company.
Based on the number of shares you own and the type, you have more or less decision-making capacity at the shareholders' meeting.
We can say that ordinary shares are ideal for those who want to have decision-making power in companies; in fact, whoever holds this type of share has all voting and profit rights, with related obligations.
The privileged and savings ones, on the other hand, are made for those who are less interested in management but more in investment and the consequent profit; in this case, there could be some limitations regarding internal deliberations, without compromising, however, the division of profits and residues.
Limited partnership by shares (Sapa) In this type of company the partners can be of two types, limited partners and general partners: limited partners, who have no administrative powers and are liable for company debts only with the capital contributed to the company (not with the assets personal); general partners, who have administrative powers and are also responsible for company debts with their own personal assets.
So they risk more, but they can manage the company.
Limited liability company (Srl) In LLCs the shares are replaced by participation shares.
The rights of the member are proportional to his share of participation, which is the limit of liability to which he belongs.
The partner enjoys limited liability, therefore his personal assets are not affected.
The LLC is a company that is liable only with its assets for corporate obligations.
The personal one of the members is, therefore, protected.
The shareholder risks only the share contributed to the company.
Compared to spas, they have a more flexible structure, therefore this type is better suited to small and medium-sized businesses.
The capital is not divided into shares, as in joint stock companies, but into participation quotas.
The minimum share capital to found an LLC is 10,000 euros.
To found a spa, however, you need at least 50,000.
read also Business with an LLC or an LLC: which is more convenient? Simplified limited liability company (Srls) The Srls is a joint stock company very similar to the previous one, with the difference that it can be opened by a single member (single member) and with a limited invested capital.
Notary and incorporation costs are low, as is the minimum capital required.
In short, it represents an economic and safer possibility for individual entrepreneurs who, in doing so, see the risk of having to answer for the obligations with their own personal assets disappear.
The Srls can even be opened without notary fees, as the law requires the use of a standard form for the deed of incorporation.
The minimum share capital is just 1 euro, with a maximum limit of 9,999 euros.
Therefore, you don't need a lot of money to open an LLC; if this threshold is exceeded, however, the company takes on the ordinary form of an LLC.
Difference between joint-stock companies and partnerships In addition to the differences already mentioned, it is important to know that the joint-stock company focuses on capital, while the joint-stock company people places the person, i.e.
the partner, as its basis.
The denominations are very clear about this.
For the joint-stock company, the shareholders are not personally liable for the debts of the company, which happens in the partnership, where the liability of the partners can extend beyond the initial investment and involve everyone's personal assets.
On the other hand, however, the partnership is usually simpler to manage, although it can be very limited in raising large amounts of capital.
Large companies can benefit from the flexibility of joint-stock companies and the ability to transfer shares.
In general, know that the transition from a joint-stock company to a partnership usually involves a series of requirements and obligations, such as the modification of the company bylaws, the approval of the competent bodies, the registration of the new corporate forms in the Company Register and the adaptation of accounting and tax compliance.
How a joint-stock company is formed The formation of a joint-stock company in Italy involves a series of steps compliant with the law.
The process begins with the drafting of the articles of association, a public document that establishes its fundamental characteristics.
The deed must contain key information such as the company name, corporate purpose, registered office, amount of share capital, division of shares, details of the founding members and more.
The shareholders sign the articles of association, committing themselves to pay the subscribed capital.
Next, you need to open a business bank account and pay in the share capital.
Once the payment has been completed, the notary authenticates the deed of incorporation and submits an application for registration in the Company Register at the competent Chamber of Commerce.
Registration is essential to confer legal personality on the company.
The Chamber of Commerce assigns a VAT number and issues the registration certificate.
Subsequently, the company must fulfill tax obligations, such as registration in the Company Register at the Revenue Agency and membership of a Social Security Institution.
Without forgetting the presence of the statute, a very important document which represents the set of rules necessary for the running of the company.
read also Capital increase: what it is, how it works, example of calculation Joint-stock company: liquidation and dissolution The liquidation (article 2487 of the civil code et seq.) and dissolution (article 2484 of the civil code et seq.) of a company capital are distinct but interconnected processes, preparatory to the definitive closure of company activities.
Usually, the process begins with a shareholders' meeting which decides on the state of liquidation, determining the cessation of activities and the start of the procedure for disinvesting the assets.
The liquidators, appointed by the shareholders themselves, proceed with the sale of assets, the payment of debts and the closure of the company's financial commitments.
At the same time, the shareholders' meeting decides on the dissolution of the company, marking the formal end of its legal existence.
During this process, the assembly approves the final statement drawn up by the liquidators, which documents in detail all the transactions carried out during the liquidation.
If, at the end of the liquidation, a residual asset remains, the meeting decides its destination, which may include distribution to shareholders or other specific purposes.
Once both processes have been completed, the company presents the necessary documentation to the Chamber of Commerce for cancellation from the Company Register.
This phase requires further formal requirements and confirmation that all tax obligations have been fulfilled.
Cancellation from the Company Register represents the final step, which establishes the definitive closure of the joint-stock company.

Author: A.W.M.

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