Partnerships and limited companies: main differences and types

Introduction

Each of us has at least once heard her talk about companies of people and companies of capital, maybe just to undertake a business or realize an idea.

But are we sure that we can always understand what kind of society is right for our needs?

In fact, there are significant differences between the two types of companies, and the choice at the time of establishment is determined for the continuation of the business and the management of the company itself.

In this article we see an overview of the types of companies that fall within the two macro groups and some of the most immediate differences between them.

Companies general features

When we talk about society, we refer to the organization of people and goods preordained to achieve a productive purpose. The members of a company, whether of persons or of capital, in fact, exercise in common a coordinated economic activity through the contributions that the members undertake to make to the company itself.

The contributions are the contributions that the members make for the formation of the initial share capital and can be both in cash and in goods or benefits. In any event, it must be made clear that the contributions of goods or services by the members are governed by a particular discipline which is sometimes different from that governing cash contributions.

The commitment of the contribution is made in the deed of incorporation, the contract by which the partners express the desire to set up a company.

The partners therefore realize a particular form of collaboration that is characterized by the fact that all participate in the risk of management of the enterprise, even if this happens differently according to the type of company chosen and the organizational structure of the same.

And it is precisely on the basis of the organizational structure that the partnerships are distinguished from the corporations.

The Partnerships

Partnerships are characterised by imperfect financial autonomy and the absence of legal personality. In addition, another distinctive feature of partnerships is the power of directors and the limited transferability of shares.

ln Italy there are three types of partnerships:

Simple society (Società semplice or S.s.)

General partnership (Società in nome collettivo or S.n.c)

Limited partnership (Società in accomandita semplice or S.a.S)

Legal personality and imperfect capital autonomy

The imperfect capital autonomy and the absence of legal personality that characterize partnerships make the members also liable for the obligations assumed by the company with their personal assets, and therefore with all the goods belonging to them both present and future.

The liability of the members of partnerships is generally joint and several since the social creditor, and therefore who has a claim against the company, can demand directly from the member with unlimited liability the fulfilment of the obligation; However, it should be pointed out that this dynamic does not always occur, but there are some exceptions expressly regulated by law.

Management powers of members

In general, every shareholder of a partnership has the power to manage the company and its assets.

However, attention must be paid in this case to a very important limitation of the power of the shareholders to manage the company: the transferability of the share.

The society of persons is characterized by a strong personalistic imprint that gives a considerable importance to the person of the member; precisely for this reason the member who intends to transfer his share can do so only with the consent of the other members, whether the transfer takes place by live deed or by succession.

As always, there are some exceptions expressly regulated by law that must be taken into account in the specific case.

Limited companies

Limited companies are characterized by perfect capital autonomy, the lack of direct power of the member in the management of the company and the free transferability of shares or shares.

in Italy There are also three types of limited liability companies:

– Limited liability company (Società a responsabilità limitata or S.r.l.)

– Limited partnership (Società in accomandita per azioni or S.a.p.a.)

– Joint stock company (Società per azioni or S.p.a.)

It should also be pointed out that in 2012 the Simplified limited liability company (Società a responsabilità limitata semplificata or S.r.l.s.) was introduced, which falls within the category of limited liability company, but, in some respects, has a particular discipline.

The perfect capital autonomy of companies

Thanks to its legal personality and perfect patrimonial autonomy, it is only the capital company that is liable for the social obligations with its assets and with its assets, both present and future.

However this does not mean that the shareholder has no liability of a patrimonial nature, since in fact his liability is limited only to that conferred for the formation of the company or for the increase of his capital.

In this case too, attention must always be paid to the cases expressly regulated by our Civil Code in which the partner of companies with share capital is exceptionally liable for social obligations even with his own personal assets.

The administration and free transferability of shareholdings

Other significant differences between corporations and partnerships appear in the management of the company itself.

The shareholder of the capital company does not directly assume the role of director, but becomes so only if expressly appointed.

The member who is not appointed director can however participate indirectly in the administration of the company by voting at the shareholders’ meeting for the appointment of directors or surveys.

Moreover, in the capital company there is no personalistic connection that characterizes the partnerships, due to this, the member may freely transfer his own shareholding, unless otherwise provided for in the Articles of Association.

Summary of the main differences

We conclude this article in which we have seen a brief overview of the major distinctions between corporations and partnerships with a summary table:

	Partnerships	Companies
Types	S.s; S.n.c.; S.a.s.	S.r.l., S.a.p.a.; S.p.a.; S.r.l.s.
Legal personality	No	yes
Asset autonomy	Imperfect, with exceptions	Perfect, with exceptions
Management powers of the members	Immediate and direct	Direct with appointment Indirect without appointment

Conclusions

In this article we have briefly seen some of the main differences in the organisational structure concerning partnerships and companies with share capital, including legal personality, capital autonomy, the management of companies and the transferability of shareholdings.

Obviously the differences do not end here and, as always, the practical cases can be the most disparate.

If you are interested in deepening some topic in particular or to report your practical experience, I will wait for you in the comments.