Franchise—Italy—Q&A guide

The following Commercial practice note provides comprehensive and up to date legal information covering:

  • Franchise—Italy—Q&A guide
  • 1. What forms of business entities are relevant to the typical franchisor?
  • 2. What laws and agencies govern the formation of business entities?
  • 3. Provide an overview of the requirements for forming and maintaining a business entity.
  • 4. What restrictions apply to foreign business entities and foreign investment?
  • 5. Briefly describe the aspects of the tax system relevant to franchisors. How are foreign businesses and individuals taxed?
  • 6. Are there any relevant labour and employment considerations for typical franchisors?
  • 7. How are trademarks and know-how protected?
  • 8. What are the relevant aspects of the real estate market and real estate law?
  • 9. How widespread is franchising in your jurisdiction? In which sectors is franchising common?
  • More...

Franchise—Italy—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to franchise in Italy published as part of the Lexology Getting the Deal Through series by Law Business Research (published: May 2020).

Authors: Rödl & Partner AS—Roberto Pera; Gennaro Sposato

1. What forms of business entities are relevant to the typical franchisor?

Like most jurisdictions, Italy recognises business entities with limited and unlimited liability. The former is preferred in common commercial practice, particularly among franchise businesses, as it protects shareholders from general business risks and allows for a better allocation of funds.

Depending on the size of the proposed business, the relationship among shareholders and the types of investment, franchisors typically choose between a company limited by shares (SpA) or a limited liability company (Srl).

SpAs are more suitable for major franchise businesses because they offer more options regarding:

  1. shareholder agreements;

  2. the issue of debt notes;

  3. the allocation of assets for particular corporate purposes; and

  4. stock listing.

Srls are more cost-efficient and suitable for small and medium-sized businesses since they permit, among other things:

  1. greater shareholder control of the company’s management;

  2. a stricter link between shareholders; and

  3. a more flexible management and shareholders’ meeting system.

2. What laws and agencies govern the formation of business entities?

Both SpAs and Srls are governed by the Italian Civil Code, which provides all relevant legal provisions for the formation of such business entities. Special rules govern

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