The Contract

Persons wishing to form a company must, before a notary, sign a public deed or authenticated private agreement that is a company contract (also called articles of association) whereby two or more persons confer assets or services for the joint operation of an economic activity in order to share the profits.

Nowadays a company may also be formed by a single person, either in the form of a share company or a limited liability company. 

The deed contains reliable information because of the prior legality review carried out by the notary and, once entered in the Register of Companies, is valid toward all (technically known as third parties). Emphasising the role of preventive justice entrusted to the notary in corporate matters is also a recent provision of the law that provides for the immediate entry of the deeds drawn up by the notary in the commercial register, leaving the latter to carry out its checks after the fact.

The notary also has specific training in corporate matters and, speaking for the law as a third party and independent of the parties involved, is able to advise prospective shareholders in the drafting of the memorandum and of shareholder agreements by balancing the interests at stake in order to avoid future disputes. In drafting the articles of association, therefore, he takes into account the specific needs of the stakeholders and the effects that the establishment and activities of the company will have on their personal financial arrangements (such as, for example, succession).