Here is a handbook of aspects to consider when setting up an innovative startup: attention to requirements, deadlines, renewals, and methods. Many think setting up an innovative startup is a simple process, often deceived by its dynamic and lean bureaucratic process or by misunderstanding the nature of a startup from that of an innovative startup. Most of the time, running into various obstacles, or rather mistakes, can make life difficult for founders, especially if they are novice startuppers. In this short guide, we analyze the ten factors you cannot distract yourself from before proceeding to the constitution of your innovative startup.
Table of Contents
The Corporate Purpose Is Everything
As established by article 2463 of the Civil Code, a Company’s corporate purpose describes its activities. The corporate purpose must be included in the articles of association. It is the description of the activities that the Company precedes to carry out. For innovative startups, the object must concern developing, producing, and marketing innovative services or products with high technological value. The description of the corporate object is not a simple action. Still, a fundamental one, as the practice could be rejected if it does not correspond to the guidelines of the MiSE.
You Can Also Set Up A Startup With An Srls
As a legal form, the startup can undoubtedly be an Srl or Srls or a Limited or Simplified Liability Company. The Simplified Limited Liability Company, introduced in 2012, unlike the Srl, which generally must have a share capital equal to or greater than 10 thousand euros, can be reduced between one euro and 9,999 euros – should it exceed this threshold, it will be transformed into an Srl. Limiting the share capital, therefore, restricts the number of startup loans that can be obtained from the banks: in these cases, it is the shareholders who have to give their capital as a guarantee, eliminating the main advantage of the Srl itself, i.e., the limitation of liability.
Another limitation concerns the shareholders themselves: they can only be natural persons, thus not being able to bring legal persons, for example, investment companies, into the Company. The Srls instead has a legal statute imposed by law, therefore not modifiable – limiting, for example, for some types of startups. The benefits are provided only for the constitution: you can do without notary and secretary fees.
You Can Transform Your Company Into An Innovative Startup Even If Already Established
Transforming a Company that has already started into an innovative startup can only be done if it was not established following an extraordinary merger or spin-off operation or if it does not derive from a Company or business unit sale. The starting requirements are as follows:
- Not to exceed 5 million in turnover
- Do not distribute profits for as long as it has been a startup since it was established.
- It must not have been established more than 60 months earlier.
- Innovative corporate purpose: I remind you again, and I stress that if it is not, to transform it, it will still be necessary to go to a notary
With these requirements, the Company must register in the special section of the Business Register. The fulfillment can be done by a notary, other appointed professionals, and the shareholders themselves. This will be followed by compiling an application in electronic format and attaching a self-certification from the legal representative, in which he declares to have all the necessary startup requirements. But he remembers: these requirements are not enough. At least one in three of those listed in point 9 is needed.
Remember The Requirements In The Last Financial Statement Filed If You Transform A Company Into An Innovative Startup
Suppose the Company intends to register as an innovative startup by taking advantage of R&D (Research and Development) expenses. In that case, these expenses must be represented in the last financial statement filed. Omission frequently occurs in Italian startups.
You Can Also Register An Agricultural Company In An Innovative Startup
An agricultural Company can request to be included in the Special Register of Innovative Startups as long as the requirements for entry into this regime are met. The corporate purpose must therefore contain all the requisites required for access to the agricultural Company and innovative startup regime.
How To Register The Startup Without Expensive Patents
Filing patents at the MiSE or for international ones at the WIPO is unnecessary. If your Company has produced software, it can be deposited in SIAE at the OLAF office at around 300 euros. It is not even necessary to wait for the evasion of the deposit: in fact, the simple request for a request is enough as a requirement, but beware: chambers of commerce are not always satisfied with just the request.
Remember The Renewal
Within 30 days from the approval of the financial statements and, in any case, within six months from the end of each financial year. Many companies forget that once established, they will have to renew the innovative startup requirements every year as reported above: under penalty of cancellation from the Business Register or the suspended practice.
If The Chamber Of Commerce Blocks Your Renewal, You Can Always Unsubscribe And Resubscribe
If you miss one of the three requirements for one year, you can still exercise the renewal even after two years from the cancellation as long as you stay within five years from the constitution.
It Is Not Necessary To Have Three Requirements. One Is Enough
To be innovative, the startup must meet at least one of the following three requirements:
- 15% R&D expenses: R&D expenses must be equal to or greater than 15% of the more excellent value between cost and the total value of production
- Qualified personnel: employment as employees or collaborators in any capacity, in a percentage equal to or greater than one-third of the total workforce, of personnel in possession of a research doctorate or who is pursuing a research doctorate at an Italian or foreign university, or in possession of a degree and who has carried out, for at least three years, certified research activity at public or private research institutes, in Italy or abroad or, in a percentage equal to or greater than two-thirds of the total workforce, of personnel in possession of a master’s degree;
- Patent: possession of at least one industrial right relating to an industrial, biotechnological invention, a semiconductor product topography, or a new plant variety or rights relating to an original computer program registered with the particular public register for computer programs.
It is, therefore, sufficient to possess at least one of the three requirements to be an innovative startup and to be registered in the special register of innovative startups.
Your Innovation Is Not A Copy Of Your Corporate Purpose
Always remember that the corporate purpose does not necessarily have to correspond to your innovative product/service. The corporate purpose must express the innovation potential in terms of product and service. Still, when you have to go and declare your activity to the Chamber of Commerce, you will need to be practical and clear about what is being achieved. For example: for the corporate purpose, my Company develops blockchain technologies in the fintech field for corporate purposes, but in practice, it develops automatic pay stations in supermarkets for bitcoin payments.