A startup arises from the desire to find a solution to a problem identified in the present, or that could arise in the near future, or even from a need to improve something in people’s lives. However, you need to be practical to transform it into a business: knowing rules and laws, organizational mechanisms and financing possibilities, basic tools to transform ideas into a concrete form. Deciding to open a startup means getting involved, embarking on an adventure journey with the possibility of an unpredictable epilogue full of implications.
What is a Startup?
Not just a romantic idea, a story of stubbornness and courage, trials and failures, joy and despair, sleepless nights and lightning-fast changes of perspective. Startups are also recognized entities that can therefore count on some economic and tax benefits for founders and investors.
Definition and types of startups
There are different types of startups, the legally recognized are innovative startups and SIAVS (innovative startups with a social vocation). The same legislative definition applies to both, but SIAVS received greater concessions.
The innovative startup as a type of enterprise was introduced with Legislative Decree 179/2012 (converted into Law 221/2012) providing for certain economic and tax benefits for founders and investors.
Articles 25-32 of Legislative Decree 179/2012 offer us the definition and characteristics of an innovative startup. In particular, paragraph 2 of article 25 reads
[…] the innovative start-up is the joint-stock company, also established in cooperative form, under Italian law or a Societas Europaea, resident in Italy pursuant to article 73 of the decree of the President of the Republic 22 December 1986, n. 917, whose shares or quotas representing the share capital are not listed on a regulated market or on a multilateral trading system, which meets the following requirements[…]
The SIAVS are distinguished by the area in which they operate, in detail the startups that deal with:
- social assistance;
- health care;
- education, training, instruction;
- protection of the environment and the ecosystem;
- enhancement of cultural heritage;
- social tourism;
- university and post-graduate training;
- research and provision of cultural services;
- extra-curricular training aimed at preventing early school leaving;
- services instrumental to social enterprises rendered by entities composed of more than 70% of organizations that exercise a social enterprise.
Requirements and costs to start an innovative startup
In order to define a startup as innovative, the company must meet some specific requirements, as established by art. 25 paragraph 2 Legislative Decree 179/2012:
- it has been established for no more than 60 months;
- it is registered in Italy or in one of the Member States of the European Union or in States party to the Agreement on the European Economic Area, provided that it has a production site or branch in Italy;
- starting from the second year of activity of the innovative start-up, the total value of annual production, as resulting from the last balance sheet approved within six months of the end of the financial year, does not exceed 5 million euros;
- it does not distribute, and has not distributed, profits;
- it has, as its exclusive or prevalent corporate purpose, the development, production and marketing of innovative products or services with high technological value;
- it was not established by a merger, demerger or following the transfer of a company or business unit.
Meets at least one of the following additional requirements:
- research and development expenses are equal to or greater than 15% of the higher value between cost and total production value;
- at least 1/3 of the workforce is made up of doctoral students, research doctorates or researchers in Italy and abroad at public or private institutes in any capacity, or at least 2/3 of partners or collaborators in any capacity possessing master’s degree;
- it has the owner or custodian or licensee of a registered patent relating to an industrial, biotechnological invention, a semiconductor product topography or a new plant variety or is the owner of the rights relating to an original computer program registered in the special public register for computer programs.
- Scalable because it must be able to grow exponentially using few available resources.
- Replicable for its processes which, once tested, must be replicable over time and in different geographical areas.
- Temporary, because it is an organization looking for its scalable and replicable business model.
- Innovative because the focal point of every startup translates into satisfying a need that has not yet found a solution in the existing market.
But how much does it cost to start a startup?
There are some startup costs, some running costs, some minimal capital.
Startup costs
The start-up costs can be estimated but are closely linked to the fees of the professionals to whom one addresses. In general, there is an average of 2,000 euros for notary and taxes, to which must be added all the annual obligations that a company is responsible for.
First you need to define the type of joint stock company: the most widespread is SRL (limited liability company) for which €1 of share capital is sufficient.
Since 29 March 2021, the online procedure for starting a startup is no longer available, so the advice of a notary is required. On average we are talking about a fee of 1,500 + VAT to which are added around € 200 in taxes. The notary will also take care of the registration in the Business Register, without which you cannot benefit from the concessions.
After the establishment of the company, it will be necessary to open the VAT number and identify a professional who takes care of accounting and tax compliance. Management costs are around €2,500+VAT per year.
Do you want to find out the advantages of the startup model and why it is worth starting an innovative startup? Read our article.
