Interest Groups and Corporate Law-making: A Lesson from the Italian Start-up Incorporation Reforms

Italy briefly allowed ‘innovative’ start-ups to incorporate online without a notary. The notarial profession challenged the scheme, and the courts invalidated it. When EU law later required an online channel for incorporation, Italy reintroduced online incorporation on different terms: remote notarial intermediation through a platform operated within the notarial infrastructure. The episode—well known in Italy but largely absent from international discussions—effectively illustrates how interest groups influence company law innovation and how institutional change unfolds in Italy. Company law innovation and institutional change tend to be ‘bounded’: reforms can change the interface, but organised gatekeepers manage to keep the architecture—and the associated economic rents—largely intact.

1. An attempt to de-notarise online start-up incorporation

In 2012, the Monti Government created a special regime for ‘innovative start-ups’, granting access to tax benefits and targeted corporate law exemptions to encourage entrepreneurship. In 2015, the Renzi Government introduced an online incorporation route for a subset of these entities, framed as a simplification measure consistent with EU small-business rhetoric as encapsulated, for instance, in the Small Business Act ‘Think Small First’ initiative.

In February and July 2016, two ministerial decrees (here and here) operationalised online incorporation and provided the relevant standard charters. Henceforth, incorporating would simply require filing the standard model with the companies’ register, which would run a formal check.

The body representing notaries nationally—Consiglio Nazionale del Notariato—challenged the scheme soon after. It argued that a ministerial act could not bypass the Civil Code’s public-deed requirement for company incorporation; and that the reform created a ‘safety gap’: registry offices would conduct an administrative review rather than a substantive legality check—leading to a potential breach of EU company law, which, under their reading, required robust preventive controls.

In March 2021, the Council of State, reversing the first-instance ruling, invalidated the decree. It accepted the hierarchy-of-sources objection and agreed that registry offices could not substitute for the legality check required by the framework. Because the decision created substantial uncertainty for the more than 3,500 start-ups that had by then incorporated digitally, the legislature enacted a statutory ‘fix’: a decree that validated existing registrations but required that subsequent charter amendments be notarised.

Online incorporation had meanwhile been reintroduced because the 2019 EU Directive on company law digitalisationrequired Member States to enable online formation without physical presence while allowing a legality check. Italy implemented it through a ‘hybrid’ route: incorporation is conducted online, while the legality review is performed remotely by a notary via videoconference. The mandatory platform was entrusted to Notartel, the IT arm of the notarial profession. In early 2026, this model is still the operative standard.

2. How to read these events

The conventional narrative treats the 2021 judgment invalidating the 2016 decree as a straightforward restoration of legality following ministerial overreach (eg, Bianca, 2021; Stella Richter Jr., 2021). That is a fair doctrinal summary, but it explains neither why the contest was so intense nor why the post-2019 outcome took the institutional form it did. 

To be sure, no one denies the relevance of legality review. Rather, the claim is that legality arguments are insufficient to explain how the chain of events unfolded, and that a political economy-based account can provide a clearer lens for understanding them. Since legal rules and legal infrastructures allocate authority and economic stakes, organised actors mobilise accordingly (Stigler, 1971). Corporate law’s evolution follows that logic as well (Romano, 1987; Enriques, 2005; Tröger, 2018). 

As in other EU jurisdictions (Arruñada, 1996), Italian notaries are a particularly durable interest group, with a long history of defending their gatekeeping function against reforms that threaten their established role (Enriques, 2005). Resistance is not only legislative; it can also be behavioural. In 2012, Italian lawmakers introduced a simplified corporate form for which notaries were required to provide services free of charge. A randomised control trial involving almost 350 notaries found widespread non-compliance with the obligation to incorporate for free (Stagnaro & Lavecchia, 2019).

This supports the proposition that, where benefits are concentrated and losses are salient, organised groups tend to outmatch diffuse constituencies (cf. Olson, 1965). But the asymmetry is also institutional and strategic. Notaries are a cohesive professional community with repeat-player advantages (including litigation capacity and technical expertise), and they can credibly present their position in the language of legality, anti-fraud controls, and transactional safety. Entrepreneurs, by contrast, are a comparatively dispersed constituency with higher turnover and limited ability to sustain collective action. None of this requires attributing bad faith: it reflects predictable incentives and capabilities. In such settings, incumbents need not ‘capture’ the process in any crude sense; it may be sufficient that they can act as effective veto players at key chokepoints (cf. Galanter, 1974).

Against that backdrop, the Renzi Government attempted to use ‘Europe as political cover’ (Grossman, 2006). By tying the 2016 measures to EU digital priorities, the government sought to reduce the domestic political cost of reform and to frame opposition as resistance to ‘modernisation’.

The notarial profession, however, opposed the reform. Two concerns animated their opposition. First, a ‘Trojan Horse’ concern: if a notary-free channel is normalised even for a narrow subset of firms (such as innovative start-ups using standard forms), it becomes harder to maintain that notarial intervention is institutionally necessary elsewhere (cf. Abbott, 1988; Streeck & Thelen, 2005). Second, a ‘backdoor’ concern: entrepreneurs might strategically qualify as start-ups to access the cheaper route and later convert into traditional corporate forms, thereby bypassing the standard entry point, which is controlled by notaries.

These concerns led to a two-pronged response. First, these concerns were recast as issues of legal certainty and transactional safety, translating an incumbency issue into a ‘public interest’ cause (cf. Schattschneider, 1960; Yandle, 1983; Baumgartner & Jones, 1993). Second, notaries’ opposition relied on legal formalism (cf. Pralle, 2003). Arguments about source hierarchy, competence, and the adequacy of legality checks offered a judicially manageable path to blocking a cost-reducing reform without requiring courts to weigh entry-cost reduction against the public functions associated with notarial involvement (cf. Alter, 2019). The claim, in other words, is not about judicial motives; it is about how organised actors select venues and legal arguments that are most likely to prevail.

The final victory in court changed the bargaining terrain. The government moved to salvage what could be salvaged—securing the validity of companies already formed through the digital route—yet stopped short of restoring the underlying ‘notary-free’ mechanism itself. Once the 2019 EU Directive on company law digitalisation made online incorporation unavoidable, the key question became governance: who would run the infrastructure, decide how (and in what order) checks would be carried out, and control the key compliance checkpoints (cf. Young, 1991). Although parliamentary discussions entertained more pluralistic technical solutions (including the possibility of platform arrangements not structurally anchored in the notarial infrastructure) (Morelli, 2021), the implemented solution converged on a model that put notaries back at the centre of the process. The profession adapted to technological change by asserting control over the relevant platform and a remotely delivered public deed process.

This institutional equilibrium has distributive implications. The 2016 channel was widely discussed as delivering substantial savings by eliminating notarial fees (up to €2,000 per incorporation). By 2025, the Notartel-enabled route reduces friction compared with a fully physical deed but does not replicate the ‘zero-cost’ bargain: notarial fees are commonly reported to persist in the several-hundred-euro range (around €600). 

3. The lesson

The case teaches a broader lesson about company law innovation and institutional change in Italy. Innovation can happen but is rarely implemented by replacing institutional functions. More often, the interface changes but the existing gatekeeping architecture is largely untouched. Pressure from interest groups can be the mechanism that shapes the outcome. In our case, de-notarised online incorporation is introduced, then abolished, and eventually online incorporation is restored, but with the mandatory assistance of a notary. Incumbents then end up exactly in the same place where they started: at the centre of the process and, therefore, able to preserve their institutional role and the associated rents.  

This is best understood as just another ‘legal revolution’ that promises to modernise the institutional framework while indeed doing little more than reproducing established legal professional hierarchies (cf. Dezalay & Garth, 2021). From a different angle, it looks like a ‘quiet politics’ episode: a technical, low-salience issue with concentrated distributive consequences, where organised incumbents can shape both the legal contest and the implementation architecture (Culpepper, 2010). In historical institutionalist language, the trajectory also looks path-dependent: once a gatekeeper is embedded in the legal-production ecosystem, reforms tend to be channelled into designs that preserve its centrality within a given corporate governance system (cf. Pierson, 2000; Bebchuk & Roe, 1999).

In conclusion, the sequence is familiar: a reform reduces entry costs, an organised gatekeeper contests it, and the arrangement that eventually emerges restores the gatekeeper at the centre of the process. As Sergio Rizzo, a prominent Italian journalist, put it when commenting on the notary-free start-up incorporation experiment and its reversal: ‘If someone wants to understand why it is so difficult to change things in this country, they will find all the answers [in this saga]’. 

Casimiro A Nigro is a Senior Lecturer in Business Law at the Leeds University School of Law.

The author thanks Luca Enriques, Alperen Gözlügöl, Stefano Lombardo, Pedro Magalhães Batista, Elsa Massoc, Gian Domenico Mosco, Paul Oudin, Alvaro Pereira, Hilary Sommerlad, and Tom Vos for valuable comments to an earlier draft. The views expressed herein are solely his own.