The family business - Law sheet - Davima S.r.l.s.Davima S.r.l.s.

The family business - Law sheet

Posted on December 12, 2022 by Davide Mastrangelo in Right

The family business is a legal institution in the Italian legal system, governed by the article 230 bis of the civil code.
Regulates the relationships that arise in a company every time a family member of the entrepreneur lends his work continuously in the family or in the same company.
The family business receives for the first time protection in 1975 with the reform of family law. The need underlying the creation of this institute was to protect against those family members who, even working within a family business, were not protected against the entrepreneur.
An unfair situation that found wide application in the world of small business, in which the father often assumed the qualification of entrepreneur, And his wife and children received nothing in exchange for their work.
Numerous research has shown a high mortality rate of the family business linked to the generational transition.
In other words, taking over the management level, of the heirs of the founder seems to be a risk factor for the survival of the company.
Index

The legal nature
The members of the Institute
Tax treatment

1. The legal nature
In Italian doctrine the question of the legal nature of the family business is vividly discussed.
The most supported theses are those that, respectively, They see in the family business a hypothesis of collective enterprise or an individual company.
The supporters of the first theory believe that all family members who provide their work within the company assume collective responsibility for third parties, and acquire the quality of coimplanders.
At the opposite, The supporters of the theory of individual business believe that in the family business it is the entrepreneur only the one to whom this qualification is due by law. Only the latter will be responsible with its own asset of fulfillment of the obligations assumed by the company, and exclusively he can be subject to failure in case of insolvency.
2. The members of the Institute
The family business is made up of the entrepreneur who usually is the founder and to whom the deeds of ordinary management are responsible for, by the spouse, for which it will be a performance and not of a co -management together with the other spouse entrepreneur, from relatives within the third degree and the similar within the second degree.
The adoptive and natural children can also be part of the company.
The family relationship must persist during the arc of the affair and the marriage disability are a reason for dissolution but not the legal separation that in how such does not fail the family bond.
From the point of view of work, the performance must be not occasional but not necessarily full -time, except different agreement (For example subordinate pursuant to art 2094 c.c. or corporate).
The tasks can be the most varied.
Family members have the right to maintenance in relation to the economic conditions of the family, to useful participation, to goods purchased with profits, and to the increases of the company.
The personal creditors of family members cannot seal the company's assets or expropria their share.
The attachment can take place exclusively on the profits paid.
Family members deliberate by majority (with vote for heads and not for quotas) they decide on the use of profits and increases as well as acts that exceed ordinary administration, the production addresses and the termination of the company.
The causes of loss of the participation fee are death, withdrawal (If the just cause is missing, it obliges the party to compensate the damage), the cessation of the family relationship, impossibility that have lent their work, the exclusion deliberated by the majority of members.
The family member cannot sell his participation in strangers, The same is transferable exclusively in favor of the other members of the family unit and with the unanimous consent of the participating family members (art. 230 Bus C.C.).
To the cessation of work for any reason (except the sale to a family member), and in case of alienation of the company without the family member exercising the pre -emption, has the right to be paid in cash and the payment can be made in several years.
In the event of hereditary division or company transfer, the participants have the right of pre -emption on the same.
3. Tax treatment
The matter is treated by the article 5 comma 4 Tuir, in which it is established that the overall participation in profits by family members, cannot exceed 49% of the amount of business income resulting from the owner's tax return.
To be subjected to this regime it is required that:

The family business was established with a public deed or authenticated private agreement at least in the year preceding the year of the tax return.
In the entrepreneur's tax return there is an indication of the profit sharing shares that are due to family members and a certification of the fact that they are commensurate with the quality and quantity of the work carried out.
May every family member attest, in your tax return, to have worked in the company on a continuous and prevalent basis.

In the tax return of family members, this income appears among participation income.
Again for direct tax purposes, any capital gains deriving from the sale of the family business must also be divided between the owner and his family.
In the case of withdrawal of a family worker from the company, the sum paid to him, corresponding to capital gains and increase in the value of goodwill between the beginning and end of his collaboration, it is not taxable to him, but at the same time it cannot be deducted from the taxable income of the company.

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