European M&A Working Group: guide on LLCs

Andersen, through the member and collaborating firms of Andersen Global and its European M&A Service Line (working group) has prepared a new guide that includes an overview on Limited Liability Companies (“LLCs” or Società a Responsabilità Limitata (S.r.l.) in Italian) in Europe, its formation and incorporation procedures with a dedicated section for each of the European countries.

the Italian partners, Andrea di Castri and Francesco Inturri, in the chapter on Italy, illustrate this form of company in Italian commercial law, the capital of which is divided into quotas, not shares. The quota-holders are liable for the company’s obligations up to the amount of their contribution in the company’s share capital. The company, on the other hand, is liable with its assets. LLCs were conceived to allow small entrepreneurs with limited capital resources to establish a company and run a business on the guarantee that their liability is limited to the amount of their contribution to the company’s share capital.

LLC quotas are freely transferable by law. Transfers may be made by deed between living persons and by inheritance. However, the LLC’s articles of association can limit or even ban transfers of the quotas, thus highlighting their personal nature.

The LLC’s articles of association can also subject the transfer to the approval of the company’s corporate bodies, or to the approval of other quota-holders or even third parties. In such cases, the quota-holder (or his/her) heirs may exit the company. This exit cause applies in all cases except where there is a ban (maximum two years) on quota transfers in the Company’s articles of association, in which case the articles may also establish that the quota-holders’ exit right cannot be exercised before the expiry of such 2-year period.