Buying a ready-made company is a good alternative for a foreign investor who wants to set up a company in Italy and start doing business immediately. This option saves the time needed for the mandatory company incorporation procedures.
A shelf company is a company that has already been registered in Italy and has all its registration documents, such as its articles of association, prepared and in order.
Foreign investors should pay close attention when making such transactions. The shelf company needs to have good financial records so that the new buyer will not have any problems in the future. Our company registration agents in Italy can help you with a company due diligence procedure required for a thorough verification of the shelf company.
A quick start for your business
Investors who decide to purchase a shelf company do so because they want to take advantage of the quick procedure: all the company will need in order to function will be a company number and a VAT number. After these steps are completed, the new managers of the company will sign the articles of association and the new owner will be able to begin the business activities.
There are several types of companies available in Italy, but two of the preferred business forms are the limited liability company and the joint stock company. The investor will choose the appropriate business form according to the size of the company, its prospects for development in the future and the possibility to invest the required share capital amount.
Foreign corporations can purchase a ready-made Italian company and use it as a branch or a subsidiary. The scope of the branch is more limited, compared to the subsidiary, and the new owners of the company will also need to change the acquired company’s name to match the one of the company abroad. If you choose to do so, out company registration experts can help you. The subsidiary is considered a separate, Italian legal entity. It will be taxed and treated separately from its mother company abroad. The subsidiary can be a limited liability company and purchasing a ready-made one is a good option for reducing the needed time for incorporation.
Our company registration agents in Italy can help you find the most suitable shelf company. We can help you draw up and submit the final documents so that the company will start its operations in the shortest amount of time possible.
A crucial step when purchasing a shelf company in Italy is to perform a thorough check-up of the legal entity offered for sale. There are many companies that specialize in selling ready-made businesses and a team of experts can help you run a background check on this provider. Our company formation agents in Italy can help you run a fiscal and legal verification in order to make sure that the company offered for sale does not have any debts and is actually registered with the Italian tax authorities.
A summary of the shelf company due diligence includes the following:
Financial: checking the company’s accounts, performing an audit if necessary and, in general, verifying the potential liabilities that the company may have incurred; if it is indeed an unused company, its financial background will not be of concern.
Contractual: the contracts that may have been signed by the company with third parties, if any.
Legal matters: any issues that may result in future claims, if left unattended.
Licensing: any issues that may be related to the company’s area of activity, if it performed any activities and if so, if it had the proper licensing during that time.
When buying a shelf company, paying attention to undisclosed debts is particularly important. The ownership of the company’s assets will also be verified in most cases.
In those situations in which the company has been incorporated but has never been used, these three areas of interest will not reveal any issues once the due diligence is complete. We strongly recommend that investors perform a thorough verification in order to ensure that they are not subject to any risky purchase. Our agents specializing in company incorporation in Italy can provide more details on this verification.
We invite you to watch a short video about how you can buy a shelf company in Italy:
Gaining ownership of your new company
Once the new company directors have signed the incorporation document, the shelf company will begin to engage in commercial activities and function just as any other type of company in Italy. A bank account will be required for the company and our experts can help you open one at an Italian bank.
Another important step after the company is transferred to the new owner is to also transfer the shares of the company from the initial owner to the current shareholders. This is done in front of a public notary in Italy.
Italian companies need to comply with the taxation laws in the country and most types of companies will also need to comply with the annual accounting and audit requirements. Our specialists in Italy can provide you with accounting services for your newly purchased company. The new company owners should be well aware that the liability for tax and reporting compliance falls on their behalf once the transfer of shares is complete.
The advantages of buying a shelf company in Italy
A foreign investor who buys a ready-made company will benefit from its credibility on the market. A shelf company will have clean records, making it easier to obtain corporate credits, leases and even enter into business arrangements. Some businessmen hesitate to sign important contracts with the owners of a newly formed company because they don’t trust a partner with no business history. In other cases, it might be even mandatory for the company to be registered for a certain amount of time or the creditor will refuse to sign business contracts.
Some investors may be interested in purchasing a ready-made company in Italy because of a particular name. In this case, the situation in which the company has not been used for trading since its incorporation is an important advantage.
Regardless of the business field in which you operate in, a ready-made company can be an excellent business option for you. Our company incorporation agents in Italy can give you more details about these companies and offer you examples of existing ready-made companies in Italy that can be bought immediately.
FAQ on shelf companies in Italy
1. How much does a shelf company in Italy cost?
The costs of a shelf company depend on the type of company and its age, which is why a specific cost cannot be calculated before knowing the client’s demands. Some businesses that offer shelf companies for sale will offer certain packages, according to the criteria already mentioned, such as the age of the company. Additional company features or longer shelf life (effective age) will imply different costs. Investors are advised to choose a shelf company package that is within their planned budget and that may satisfy their criteria for longevity.
2. What types of activities can a shelf company undertake?
The shelf company can operate in any industry once it has obtained the necessary business licenses. For example, companies in the financial services sector will be to be licensed accordingly by the Italian Securities and Exchange Authority. One of our agents who specialize in company formation in Italy can provide investors with complete details about the regulations that apply in different business fields.
3. Does the shelf company have a bank account?
In most cases, shelf companies in Italy come with bank accounts. However, investors should keep in mind that ready-made company packages could include various offers. Those that also have a bank account will typically be included in a different price range. If the company is incorporated but a bank account has not been opened yet, the new owner can easily open a bank account with a chosen Italian bank branch.
4. Can the shelf company’s name be changed?
Yes, the new owner can change the name of the Italian shelf company he or she purchased. This will involve a number of steps, among which verifying the availability of the new name, making the necessary notifications to the Italian authorities as well as altering the Articles of Association in order to specify the new name. Our agents who provide company formation services in Italy can also offer services related to changing the particularities of the company.
5. Is it worth buying a shelf company in Italy?
Shelf companies are more expensive than the registration procedure of new companies, however, they are a good solution for those interested in operating on the Italian market as soon as possible. To entrepreneurs who are interested in signing certain business contracts as soon as possible, the advantages outweigh the issues related to the probable higher costs for purchasing a shelf company and, when applicable, also paying additional services. The business goals, the available budget as well as the business field in which the company activates (a field in which longevity may be of great importance) are to be taken into consideration when buying a shelf company and determining if this is the most suitable business choice.
Company formation in Italy statistics
Our team of company formation agents in Italy presents the following statistics about the number of companies that were active in selected Italian regions in September 2019.
In Lombardy, the region where the cities of Milan, Como and Bergamo are located, there were 961,683 active registreed companies. In the Lazio region, where Rome is located, there were 661,794 active companies. In other areas the situation was as follows:
- 595,239: companies registered in the Campania region, with cities like Naples, Avellino or Benevento.
- 484,714: companies in the Veneto region, which includes the city of Venice, Padua, Verona, and Vicenza.
- 467,447: companies in the Sicily region, including the cities of Palermo, Catania, Messina, and Marsala.
Investors who are interested in buying a shelf company instead of commencing the process to open a company in Italy can choose one that is already incorporated in an Italian city that corresponds with their geographical needs for the business.
If you need legal assistance or advice, you can contact us as well as our partner local lawyers and accountants.