The decision to establish a holding is a strategic move, and the choice of legal form is a crucial element. Often, clients initially lean towards the limited liability company (Srl), overlooking viable alternatives such as the simple company and the trust. In this detailed analysis, we will explore various aspects guiding the decision, considering management costs, contributions withdrawal, profit taxes, revaluation, asset protection, and generational transition.
Management Costs: Simple Company vs. Srl.
From a management cost perspective, the simple company emerges as the more “economical” solution. The simplicity of compliance compared to Srl makes it attractive for those seeking streamlined management. In the context of the trust, consideration must be given to the compensation to be recognized to the trustee for their management activities.
Contributions Withdrawal: Srl Advantages.
At the moment of transferring participations to the holding by an individual, the Srl offers significant advantages. It allows access to the controlled realization regime, excluded for simple companies, which involve a realization-type operation. For the trust, the contribution of participations is not tax-relevant.
Profit Taxes: Detailed Analysis of Legal Forms.
Regarding taxes on profits distributed by subsidiaries, the Srl benefits from lower taxation. Profits contribute to the holding’s income only up to 5% of their amount, with higher taxation at the time of potential allocation to individuals. The simple company, on the other hand, involves “transparent” taxation on the shareholders (with a 26% rate for non-entrepreneur individuals), with a withdrawal that exhausts the tax burden. For the non-commercial trust, profits received entirely affect the determination of taxable income, subject to a 24% Ires if the trust is opaque (this will exhaust the taxation, making subsequent income allocation to beneficiaries irrelevant) or progressive Irpef taxation for transparent trusts.
Revaluation, Isa, Comodo: Considerations for Simple Companies and Trusts.
Simple companies and non-commercial trusts can revalue participations in anticipation of a possible sale, avoiding advanced taxes (Isa) and the regulations of “comodo” companies.
Asset Protection: Impignorability of Simple Companies.
Article 2471 of the Civil Code admits the seizure of Srl participations, whereas those in the simple company are impervious to seizure. The trust provides maximum protection, preventing creditors from attacking the assets or interfering in management.
Generational Transition: Trust Advantages.
In the context of generational transition, the trust stands out for its advantages. Transferring participations to a trust allows deferring and planning the moment when beneficiaries will potentially take over the company’s leadership. This limits critical situations for surviving partners at the time of the original partner’s death, as they continue to interact with the trustee, thereby mitigating internal conflict risks.
In conclusion, the decision on the legal form for a holding requires a thorough analysis of the variables involved. The choice between Srl, simple company, and trust depends on management costs, taxation, revaluation of participations, and asset protection, with the trust distinguishing itself for its advantages in generational transition planning and maximum asset protection.
For further information, it is recommended to consult with your tax advisor.
