An SRL one shareholder is a limited liability company with a sole shareholder. The constitution and functioning are identical to an SRL with several partners but there are some peculiarities. Let’s find out all the features and costs to set up a single-member SRL.
The unipersonal SRL: what it is and peculiarities
The unipersonal SRL is a normal limited liability company in which, however, only one person participates. The sole shareholder of an SRL can be both a natural person and a legal person (e.g. another limited liability company or a SPA).
The law requires that the presence of a single shareholder be made known in various ways. The single-member company is obliged to expressly indicate in the documents and correspondence that it has only one shareholder. In particular, in the communications and official documents of the company (e.g. in e-mails, letters or on the website) it is always necessary to indicate the presence of a single shareholder next to the name of the company. For example, the company Alfa SRL must always write “Alfa SRL unipersonal” or “Alfa SRL a socio unicorn” in all its communications.
Other types of single-member companies
The ordinary SRL is not the only form with which a single-member company can be established. In fact, it will also be possible to decide on the establishment of a simplified single-member limited liability company. However, in this type of company, the sole shareholder can only be a natural person and the share capital cannot exceed € 9,999. The other company form that allows the constitution in a unipersonal form is the SPA. However, this type of company is much less used to carry out entrepreneurial activity alone due to the higher costs that must be faced, both for the establishment and for the subsequent management.
The responsibility of the sole shareholder
For all types of SRL, even those with a sole shareholder, the principle of perfect financial autonomy applies. In other words, the company is only liable for its debts with its own assets. This means that the creditors of the company will be able to retaliate on the assets of the company and not also on the personal assets of the shareholder which remains separate from that of the company.
However, for the single-member SRL, there are cases in which the benefit of limited liability can be lost. The sole shareholder could also respond with his own personal assets for the corporate obligations in cases where:
- the share capital has not been fully paid up by the sole shareholder. This can hardly take place at the time of constitution or capital increase. The most frequent case is that of a company that “loses” all but one shareholder. When this happens, the sole shareholder will have to pay the share capital within 90 days
- the mandatory communication of the presence of a single shareholder to the Register of Companies has not been made
How to set up a single shareholder limited liability company
To open an SRL with a single shareholder, a series of steps and requirements are required. Let’s see them in detail.
1. Creation of the articles of association and statute
The first step is to draw up the necessary documents: the deed of incorporation and the statute. The deed of incorporation contains all the main information on the company (e.g. company name, capital payments) and the data of the sole shareholder. The statute, on the other hand, establishes the rules for the functioning of the company (e.g. the rules on the administration and transfer of shares).
2. Payment of the share capital in the sole shareholder limited liability company
After the creation of the documents, the sole shareholder will have to pay the share capital of the company. The share capital is the initial equity of the company and is made up of the amounts paid at the time of incorporation. The single-member SRL does not have a maximum amount limit and a minimum capital of € 1 is sufficient.
Unlike an SRL with several partners, the sole shareholder of the single-member company is required to pay the contributions in cash to the company in full. The sole shareholder cannot, therefore, pay only a part of the capital at the time of incorporation as in companies with several shareholders.
3. Establishment by the notary and subsequent obligations
The next step is the signing of the deed of incorporation before a notary. After signing the deed, it will therefore be necessary to open the company’s VAT number and register it in the Business Register. With the registration, the SRL officially exists as an active company and will be able to start carrying out the activity regularly.
Costs and taxes of a sole shareholder limited liability company
For the opening of a single-member limited liability company, various costs must be taken into account: the opening costs, the subsequent accounting costs and taxes.
First of all, is the cost of setting up by the notary which on average costs about € 1,500 + VAT. To this we must add some constitutional taxes (about € 690 for the rights in the Chamber of Commerce and the notary archive fee).
With our SRL establishment service, opening your own company is quick and easy. The service costs € 999 + VAT + approximately € 690 of taxes, includes 1 year of 100% online legal support and everything you need to set up your company with the full assistance of experienced professionals. After the establishment, you can create tailor-made contracts and request consultations with professionals for any need of the new company (e.g. contracts for suppliers and customers, commercial agreements, trademark registration, privacy and website terms and conditions).
In addition to the incorporation costs, there are a number of tax and accounting expenses for the company to consider. These are aspects that are generally dealt with by the accountant who follows the SRL. The average cost of an accountant for an SRL is around € 2,500 per year. To this, we must add some expenses and taxes such as those relating to the endorsement of mandatory company books for about € 700 (including the notary’s fee for endorsement and the government concession tax).
For these requirements, the online accounting service is also available for our customers at the price of € 299 + VAT for the first four months, over € 700 of initial taxes. This price includes all the necessary formalities after the establishment of the company.
Instead, the cost of taxes is variable and depends on the annual turnover and the costs of the activity. In any case, companies are subject to IRES (Corporate Income Tax) and IRAP (Regional Tax on Productive Activities) which vary locally.
Administration in a single-member company and INPS
In the unipersonal SRL, the normal forms of administration of a limited liability company with several partners can be chosen. You can choose between the sole director or the board of directors. Often the sole shareholder is also a director of the company (sole or member of the Board of Directors), but nothing prevents the management of the company from being entrusted to one or more external directors.
Furthermore, the sole shareholder of an SRL, if he operates in the tertiary sector (e.g. commerce, tourism, etc.) and usually carries out activities in the company, is required to pay contributions through the registration INPS (Gemstone Commercianti) as a working partner. This fulfillment is also necessary in the case of the shareholder and sole director of the single-member company. The shareholder-director, in fact, carries out a habitual activity of management and control and cannot evade the contribution obligations.
Advantages and disadvantages of single-member SRLs
Setting up a single-member SRL is not the only way to start an individual business. In fact, you can choose, for example, to start your own business by setting up a simplified single-member SRL that allows you to reduce initial costs while accepting various limitations compared to an ordinary SRL. If you do not want to set up a company, the main alternative to the establishment of a single-member SRL is the ‘ opening of a VAT one-man business that allows you to save on costs of opening and presents a risk of it easier and with fewer formalities.
It is therefore important to evaluate the positive and negative aspects of setting up a single-member SRL compared to opening a sole proprietorship.
Among the advantages of opening a single-member SRL you can certainly list:
- the limited liability of the shareholder with respect to the debts of the company: the shareholder risks in the business activity “only” the amount paid for the share capital
- have an estate and name separate from that of the shareholder
- possibility of having other partners in the future
The disadvantages of opening a single-member SRL, however, are:
- the presence of higher costs for setting up the company compared to a personal VAT number
- an appointment with a notary is necessary for the stipulation
- higher costs for annual accounting management
- taxes generally higher than a VAT number (e.g. a flat-rate VAT number in the first 5 years enjoys a tax rate of 5%)