Welcome back to Financial Empires, if you are here it is because you surely have in mind to start a company and you do not know what the difference is between joint stock companies and partnerships and therefore most likely you need help in choosing the most suitable company form. appropriate to your business.
First of all it must be said that before starting a business of any kind it is good to talk to your consultant to choose the most appropriate corporate form as the latter can affect both the material management of the company but above all on the economic one, especially if your business goes downhill.
Let’s start immediately by talking about partnerships that are generally much easier to manage than the former. The Italian legal system provides for different types and they are those listed below:
- Simple company (S.s.): they are made up of a plurality of shareholders who are jointly and unlimitedly liable for the corporate obligations;
- General partnership (S.n.c.);
- Limited partnership (S.a.s.): they are characterized by the presence of two different categories of partners: general partners and limited partners.
The responsibility of the members
The main characteristics that these three companies have in common are linked above all to the responsibility of the shareholders who in the event of a bankruptcy are 100% liable with their personal assets once the share conferred on the company has been exhausted, in fact we speak of unlimited liability.
There is also talk of joint and several liability as in partnerships any creditor can attack the personal assets of one of the partners thus responding to one another.
Finally, as well as a little anticipated, we have a subsidiary responsibility, which means that the shareholders’ assets can be attacked by creditors only after the corporate assets are exhausted and therefore it is no longer possible to retaliate against the latter.
Another very interesting aspect of partnerships is that they are established through the contribution of a loan, usually called quota.
The share must be paid in kind by the shareholders at the time of incorporation. We also remind you that the debt capital consisting of the debts contracted by the company with banks and lenders is also among the sources of financing.
The particular case of the S.a.s
A particular case of partnership is the s.a.s, which unlike the other two corporate forms is established through the presence of two distinct types of partners, general partners and limited partners.
The difference between these two types of partners lies in the fact that the former are unlimitedly liable with their personal assets while the limited partners are responsible only for the share conferred, it must be said that if a limited partner becomes a director of the company, he automatically loses his right.
In fact, we remind you that the limited partners cannot in any way interfere with the management of the company which is instead the responsibility of the general partners.
Joint-stock companies are certainly the company form by far more used than the former, this is because although generally much more expensive than the former even for a more bureaucratic management, they retain considerable benefits for entrepreneurs and which we will soon see. .
Below is the list of joint stock companies provided for by Italian law:
- Joint-stock company (S.p.A.);
- Limited partnership limited by shares (S.a.p.A.);
- Limited Liability Company (S.r.l.);
- Simplified limited liability company (S.r.l.s.).
Liability in joint stock companies
Unlike partnerships, corporations have perfect patrimonial autonomy, this means that in case your business goes badly, you are liable only for the quota or shares conferred and no one will be able to make up for it through the personal assets of the partners except for criminal offenses. committed in the management of the company itself that may invalidate this right.
We remind you that the limited liability companies are an exception, where the general partners are liable indefinitely and jointly with their personal assets.
Furthermore, corporations have legal personality, which means that by law they are legal entities separate from those of the individual shareholders.
The establishment and management of joint stock companies
As we said, joint-stock companies are decidedly more abstruse than the counterpart already from their constitution, in fact they must be established in the presence of a notary, a statute must be signed in which the corporate objective, duties and positions of the other shareholders within the company, a meeting is envisaged, one or more directors, moreover in some of the joint-stock companies the conferment takes place through shares rather than quotas, this is the case of the Spa or Sapa
Did you find this article interesting? Leave a like on our FB page, see you soon and good continuation on Financial Empires.
Financial Empires, The Editorial Staff
© REPRODUCTION RESERVED