Start-up and PMI Innovative features and benefits

Start-up and PMI innovative are two forms of company whose main characteristic is precisely that of having a social object or in any case, the carrying out of so-called Innovative activities.

In this News, we will see what are the requirements to be able to take advantage of the advantages reserved for these types of companies and what peculiarities they have.

Innovative start-ups

The innovative start-up is defined as a joint-stock company, also established in the form of a cooperative, which carries out activities necessary to develop and introduce innovative products, services or production processes with high technological value, whose shares or quotas representing the share capital do not are listed on the regulated market.

The innovative start-up cannot have a duration of more than 5 years and therefore at the end of the period the benefits and tax and civil benefits that we will see later are lost.

In order to be considered innovative start-up, at least one of the following requirements must be met:

• R&D expenses equal to or greater than 15% of the higher value between cost and total production value;
• At least 1/3 of workers hold a doctorate or 2/3 hold a master's degree;
• Be the owner, licensee or depositary of at least one patent or utility model for the industry, biotechnology, semiconductors or plant varieties.

In addition to these requisites, it is also important to underline that no profits can be distributed for the subsidized five-year period.

Tax incentives

Tax incentives are envisaged both for corporations and for natural persons who invest in innovative start-ups.

• 40% deduction for corporations of taxable income up to a maximum of €1,800,000 for each tax period. If the deduction is higher than the total declared income, the excess can be used in subsequent tax periods but no later than the 3rd.
• In cases of acquisition of the entire share capital of the innovative start-up, a 50% discount is provided on the condition that the shareholding is held for at least 3 years.

a natural person makes the investment, a deduction of 40% is envisaged to be recovered in the tax return.

In addition to these advantages, there is also the non-submission to the regulation of shell companies.

Finally, there is the possibility of offsetting the VAT credit without the need for a visa or guarantee.

Exceptions to corporate law

Innovative start-ups are also beneficiaries of exceptions envisaged for the normal company law discipline, in particular, the following are foreseen:

• As long as the company enjoys the benefit of being an innovative Start-up, it cannot be declared bankrupt or be subject to other insolvency proceedings
• In the event that the company suffers a loss that brings the share capital below the legal minimum, the decision of the shareholders' meeting on its possible reconstitution is postponed to the second year following that of approval of the financial statements in which the loss occurred, with the exception of the provisions of article 2482-bis
• Possibility of creating unit categories as foreseen in the SpA

The possibility of being able to establish categories of shares has the purpose of facilitating the investments of individuals and companies in innovative start-ups and allowing the latter to manage, for example, the financing shareholders, denying them the right to vote on certain issues.

Innovative SMEs

Innovative SMEs have substantially the same access requirements as innovative start-ups with some differences. Clearly, the main difference is that it is not a start-up and therefore it is a company that has certainly been operating in the market for more than 5 years and has passed the initial start-up phase managing to find a market in which to develop. This does not mean that you can immediately set up an Innovative SME without going through the start-up phase, for example, to distribute profits.

The requirements to access this scheme are:

employing fewer than 250 employees;

• annual turnover of less than 50 million euros or balance sheet assets not exceeding 43 million euros;
• constitution in the form of a capital company;
• head office in Italy or in another country of the European Union or belonging to the Agreement on the European Economic Area, provided that the production site is in Italy;
• two-year period certified by an auditor or an auditing firm;
• shares not listed on regulated markets;
• non-registration in the Special Section of the Business Register dedicated to innovative start-ups and certified incubators;
• innovative content of the company, which is such if at least two of the following three requirements are met:

o   volume of expenditure on research and development equal to or greater than 3% of the greater of cost and value of production, excluding expenditure for the purchase and rental of real estate

o   employment of employees and collaborators who for at least 1/5 are in possession of a research doctorate or degree but, in this case, with certified research activities carried out in public or private institutes or who for at least 1/3 are in possession of a master's degree;

o   possession (also as licensee) of at least one industrial property right pertaining to the corporate purpose and business activity.

Tax concessions

The same tax breaks and investment incentives as for innovative start-ups are provided for Innovative SMEs.

Exceptions to company law

Also for Innovative PMI there is the possibility of providing in the statute categories of quotas in addition to the already foreseen particular rights of the shareholder foreseen by the normal regulation.

The share categories differ from the special rights of the shareholder in that the former are not linked to the person who holds them. This means that in the event of a transfer of a share linked to a particular category, the rights connected to that share category also pass.

Differently for the particular rights of the shareholder, the right is anchored to the person, therefore the transfer of the share does not also involve the transfer of the right.

Dr. Lorenzo Rogai

For any other information, please contact the Rogai & Partners studio

www.studiorogai.it

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