Find out how the payment of the share capital in an SRL works. Let’s see together all the rules on the payment of capital: how much, how and to whom to pay it
What is the payment of the capital in the SRL?
By payment of the share capital we mean the delivery to the administrator of all the contributions of the shareholders. The share capital is used to provide the company with initial assets to guarantee the business activity and its future operations.
The minimum share capital to be paid at the time of incorporation of an SRL can also be € 1. This is a new legislation introduced in 2013 which made it possible to start an SRL of any type by paying a share capital even less than € 10,000 (Legislative Decree 76/2013).
How the share capital can be paid?
The share capital can be paid in cash, in work or services, in credits or in goods. Let’s see in detail all these methods.
Contributions in cash
If the deed of incorporation of the SRL does not establish otherwise, the contribution must be paid in cash. Contributions in cash can be paid with any form of payment and precisely:
- Cash: the anti-money laundering legislation provides for the limit for shareholders not to pay more than € 1,999 in cash
- Bank transfer: at the time of constitution it is necessary to attach a copy of the bank transfer made to the administrator
- Check circular: it is a different type of check from the normal checks because it guarantees the coverage of the sum to be conferred. For the payment of the capital normal bank checks cannot be used but only cashier checks.
Contributions in work or services
In limited liability companies, the shareholder can confer his / her work, intellectual or manual activity. In this case, we speak of the working partner (or working partner) who participates in the share capital with his own work or services. In this case, it is necessary to have the work performance estimated by an expert (eg auditor) to determine the value of the contribution.
To ensure the effective fulfillment of the obligation assumed by the shareholder (the performance of the service), the deposit of an insurance policy or a bank guarantee equal to the value of the service is also required.
However, this is a procedure that can be complex and burdensome. For this reason, if one of the shareholders wants to contribute his work, it may be convenient to evaluate an incentive plan (also called work for equity or stock option plan).
Contributions in credits and assets
Shareholders can also confer credits or assets (movable, immovable and intangible). For example, a machine, an office, a patent or know-how or a credit accrued against a subject may be conferred.
Also in this case, to certify the value of these contributions, the attachment of an expert’s report is required. For example, the value of the contribution can be estimated by an accountant or a real estate appraiser.
How much capital must be paid?
An ordinary SRL can be established with a minimum share capital of even € 1. Depending on the actual amount of capital, members may be required to pay up all of the capital at the time of incorporation.
In particular, if the share capital is greater than or equal to € 10,000, the shareholders must pay at least 25% of the contributions necessarily in cash, bank transfer or check. The remaining 75% of the contributions (so-called payment of tenths) can be paid at a later time also in kind (eg provision of services, goods or credits). For example, if the company is established with € 10,000 of share capital, the shareholders will have to pay only € 2,500 in cash immediately. The remaining € 7,500 can be paid later by granting a credit.
If the shareholders do not respect the commitment to pay 75% of the contributions, the directors must warn the shareholder to complete the payment. In the event that the shareholder fails to pay the amount due, his share will be sold until he is excluded from the company.
To set up an SRL with a capital of less than € 10,000, a single-member SRL or an SRLS, on the other hand, the capital must be fully paid up at the time of incorporation. Furthermore, in these cases, contributions can only be paid in cash, bank transfer or check.
When to pay in the capital
The share capital must be paid up at the time of the establishment of an SRL. This general rule can be respected when the payment is made in cash. In practice, however, a bank transfer is often made, which can take a few days to credit the amount and generate a receipt. In these cases, it is possible to make the transfer a few days before the establishment and present the receipt to the notary.
To whom the payment of share capital must be made
Shareholders must pay the contribution in cash into the hands of the administrator. In the event that the company is managed by a board of directors, in general, the chairman or another member designated for the purpose receives the contributions. In the case, on the other hand, of companies with sole director, the shareholder-director will have to make a transfer to himself from one of his current accounts to another in his name (or joint name).
The administrator must prove the payment by all the shareholders at the time of incorporation. However, the directors are not always present at the time of incorporation. In this case, the share capital can be paid in the following ways:
- by cash, bank transfer, or cashier’s check also sending a written declaration to the notary (e.g. by certified e-mail) with which the administrators declare that they have received the payment of the contributions, attaching the proof of the means of payment (receipt of the transfer to them made out or a copy of the cashier’s check in their name or in the name of the company);
- by proxy to the notary, with whom the same may, in the name and on behalf of the directors, receive the payment of the capital and in turn pay it into a current account in the name of the company following its registration in the Register of Companies;
- with a prior bank deposit of the capital payments. In this case, the shareholders pay the contributions to the bank into an escrow account with the company.