In share capital companies the financial autonomy is perfect in that the shareholders are accountable for the debts of the company only in proportion to the share they hold.
This means:
- that the personal creditors of a shareholder can never receive payment from the company;
- that creditors of the company, in turn, can never expect the members to use their personal assets to pay for the company’s debts.
The financial circumstances of the shareholder of a company with share capital will never affect the company’s assets and vice versa, with the sole exception in which all the quotas or shares of the company are held by a single person and when the obligations envisaged by the law are not fulfilled (refer to the provisions of the law in force on limited liability companies (s.r.l.) and on single-person companies limited by shares (s.p.a.). Seek the professional advice of your notary public.
In partnerships financial autonomy is imperfect:
- for instance, in informal partnerships and in other forms of partnership (general partnerships and limited partnerships) only when the life of the partnership is extended does the law envisage that a partner’s share can be liquidated for his personal debts;
- moreover the law envisages unlimited and joint and several liability of the partners (except for the inactive/limited partner) and hence their personal assets are used to pay for the company’s remaining debts once all of the company’s assets have been used.
Perfect financial autonomy means that if the company goes bankrupt the bankruptcy does not apply to the partners, whereas when the financial autonomy is imperfect also the partner who has unlimited responsibility goes bankrupt.
On the other hand, if the partner who has unlimited responsibility goes bankrupt, the company does not.