From the Italian Ministry of Economic Development, stricter checks on Startups and SMBs

Recently the Italian Ministry for Economic Development, with letter 3696/C of 14 February 2017, has attempted to dispel some of the doubts expressed on the legal checks that the Business Registry Offices have to carry out, following their registration in the special section dedicated to startups and innovative SMBs (preventative checks) and during the validity of the special status of innovative startup and innovative SMB (dynamic checks).

The letter clarifies the terms in which the checks of the essential requirements should be made, their absence ontologically excluding the definition of innovative startup. Summing up, the checks are aimed at making sure that the startup:

  • Is a non-listed company
  • Has been operating for no more than 60 months
  • Has an annual production of less than 5 million Euro
  • Does not distribute profits
  • Is headquartered in Italy or in an EU state (provided it has an operation in Italy)
  • Has a high-technology mission. To check this the Register of Companies will refer to what the startup itself declared upon presenting the request for special status or referring directly to the Ministry as appropriate
  • Complies with two of the three alternative requirements

Only after this first check will the elements be verified and communicated to the company in order to add it to the special section (the first check must be undertaken before the second as it is preparatory to it).

For startups there is also a check to be performed on the natural loss of conditions following the expiry of the maximum period set by the rule.

For SMB there shall be an “annual check on the existence of a certified financial statement which, once the SMB is added to the special section – as specified by the letter – becomes a legal certification, subject to all requirements called for by D.Lgs. n. 39/2010, both regarding the appointment of an auditor and the approval by the assembly of the budget review, in one with the financial statement and deposited at the same moment as the statement itself”.

In both cases, both startups and SMBs will be subject to checks on the annual declaration of subsisting requirements.
Several rules have been emanated to simplify bureaucratic proceedings. Since July 2016 it is possible to set up this type of company in a simple and alternative way to registering an official record, using a standard module issued by the Ministry of Economic Development (MISE). It is also possible to draft the records in electronic form, derogating from the rules of the Civil code.

As for the constitution act, also the new module approved by MISE to modify the articles of association and the statute of innovative startups set up as “SrL” (limited liability company), shall be written in electronic format and signed digitally (art, 24 of C.A.D.). In this specific case the document shall be signed by the Chairman of the board and by all partners who approved the act (for multi-person partnerships), or by the single partner (for single person companies), as per the standard set by the decree.

In addition, the electronic document shall be presented for incorporation in the territorial registry of companies within 30 days of the board meeting.