For the first time, bitcoin has been used to incorporate a legal entity in Italy. The legal status of Bitcoin varies by country, but the Bank of Italy defines it as an unregulated digital decentralized virtual currency based on peer-to-peer, encryption on a shared blockchain.
According to Italian Civil Code, the formation of a private limited company requires that the company have a minimum capital amount of €10,000. This minimum capital requirement means that business owners must make an initial contribution to the company.
According to Art. 2464 of the Italian Civil Code, “1. The value of the contributions may not be less than the total capital. 2. Any assets capable of economic assessment can contribute to capital.” Based on that definition of capital contributions, Thomas Bertani incorporated a new private limited company using bitcoin.
On March 24, 2015, Bertani incorporated Oraclize Srl (Extract of Public Register) with a capital contribution of 45 bitcoin, which was registered by Public Notary Giacomo Pieraccini (Act of Incorporation).
Stefano Capaccioli assisted with the incorporation to ensure proper identification, traceability and proof of property through the validation of the signature that manages the Bitcoin address. Capaccioli, CPA and auditor in Arezzo, Italy, is founder of AssoB.it, an Italian association that aims to represent businesses and promote the activities on blockchain technology.
This form of contribution is made during the process of incorporation. The transparency and traceability of this process is important, most notably during the passage of the ownership of bitcoin and verification of any further transaction. Making this contribution in bitcoin allows for additional transparency.
This process is similar to the one used by Spanish Bitcoin exchange Coinffeine, which used bitcoin as initial capital funding called “social capital” in Spain. As in Italy, Spanish law permits the social capital for a corporation to be real goods rather than cash only. In this case, the four engineers who founded Coinffeine used bitcoin instead of Euros.
The newly incorporated company aims to build a platform (www.oraclize.it) for the creation of smart contracts, in which some bitcoin transactions can take place based on the occurrence of some verifiable real-life event, based on third-party services which were already acting as oracles such as Wolfram Alpha.
Oraclize brings the computable knowledge of these complex engines to the Bitcoin world. The main purpose is setting up a powerful platform to create and execute smart contracts while keeping the users in control of their funds, thanks to the use of multisig wallets.
This article has been updated to include information about Coinffeine’s incorporation using bitcoin as social capital.
Stefano Capaccioli is CPA, Auditor, Tax litigator, Tax Advisor, Business Consultant, Specialized in Law & Tax on Gold, Precious Metals and Cryptocurrencies (www.coinlex.it). Arezzo, Tuscany, Italy.