Italy: Decree On Competitiveness

News For Corporate Shares And Share Capital
Last Updated: 22 October 2014
Article by Batini Colombo Saottinis' Tax Team

1 INTRODUCTION

The Law Decree nr. 91 dated June 24th 2014 (known also as "competitiveness decree"), enforced on June 25th, has been converted with modifications in the Law nr. 116 dated August 8th 2014, enforced on August 21th 2014.

With this Update we analyse the most important changes made to the corporate shares and share capital rules.

2 THE MINIMUM SHARE CAPITAL FOR PUBLIC LIMITED COMPANIES (S.P.A.)

In order to incorporate a Public Limited Company (in Italian Società per Azioni or S.p.A.) the minimum share capital has been decreased from Euro 120.000,00 to Euro 50.000,00.

2.1 Effective date

The new minimum amount for the share capital is effective starting from June 25th 2014.

2.2 Main consequences of the new minimum amount

The decrease of the minimum share capital for Public Limited Companies has important consequences with relation to:

  • The amounts of payments at the moment of the incorporation of the company;
  • The re-capitalization of the company if and when needed;
  • The voluntary reduction of the share capital.

2.2.1 The amounts of payments at the moment of the incorporation of the company

In case of incorporation of a SpA with minimum share capital (today equal to Euro 50.000,00) and payment entirely made with cash, payments to be made (according to article 2342, paragraph 2 of the Italian Civil Code at least 25% of the minimum share capital), in case of multiple shareholders decrease from Euro 30.000,00 to Euro 12.500,00.

This only in case of two or more shareholders. In case of SpA with just one shareholders, in fact, the same article obliges to pay the entire minimum share capital of Euro 50.000,00.

This value, moreover, has also to be considered in case of payments made with assets (under article 2342, paragraph 3): shares corresponding to those payments have to be entirely free at the moment of their subscription.

2.2.2 Consequences in case of relevant losses

With regard to reflections that these news have in case of relevant losses, we underline how, under article 2447, if, for losses exceeding 1/3 of the share capital, this one is reduced under the minimum level set by article 2327, that is, starting from June 25th 2014, Euro 50.000,00, the Directors of the company have to summon the General Meeting of the shareholders to resolve on:

  • The decrease of the share capital and the simultaneous increase to the minimum level;
  • Or the transformation of the company into a Srl or a Limited Liability Company.

2.2.3 Consequences on the voluntary decrease of the share capital

The decrease of the minimum share capital to Euro 50.000,00 impact also on the potential decision of voluntarily reducing the share capital.

Under article 2445, paragraph 2, in fact, the voluntary reduction of the corporate share capital can happen through the relief of the shareholders to make payments still due, and through the refund of the share capital to shareholders, within the limits set by article 2327, that is to the minimum level of Euro 50.000,00 (in addition article 2413 obliges to verify the limits set for the ratio needed between share capital, legal and available reserves and bonds issued by the company).

2.3 Minimum share capital for the SapA (Società in accomandita per azioni)

The new minimum level is applied also to SapA, since article 2454 makes reference, for these type of companies, to rules set for SpAs when applicable.

3 AUDITING IN THE LIMITED LIABILITY COMPANIES (SRL)

The need to appoint a single auditor or a Board of Auditors in a Srl with a share capital not lower than the one foreseen for the SpA, has been cancelled (with the abrogation of the article 2447, paragraph 2).

As a consequence the appointment of a Board of Auditors or a single Auditor in a Srl is linked just to exceeding the limits to draft the annual financials in the ordinary format (assets exceeding 4,4 Ml, turnover exceeding 8,8 Ml, average of employees more than 50), to the fact the company is obliged to file consolidated annual accounts or the company controls another company obliged to have annual financials audited (article 2447, paragraph 3).

3.1 Dismissal of the existing Board of Auditors

When the Decree has been converted into Law, the legislator has clarified that the upcoming obligation of appointing the auditors, no more linked to the minimum share capital, give a just clause to dismiss the existing single auditor or the Board of Auditors.

It is still not clear if the dismissal has to be supported by the Italian Court of Justice under rquirements of article 2400, paragraph 2.

3.2 News of the Law Decree nr. 91/2014 and new statutory clauses

Given the giving out of the obligation to appoint auditors with relation to the amount of the share capital, it is needed also to verify the reflections of these news on the existing statues of the Srls carrying provisions for this requisite.

The theme has been analysed by the Italian National Counsel of Public Notaries in Rome that has specified that, following the modification made to article 2447, even for the existing Srls registered in the Italian Companies register at the effective date (June 25th 2014), the need to appoint the auditors is:

  • Mandatory – in addition to the cases foresessn by article 2447 – if the incorporation deed (and statute) of the company foresees the appointment of an auditing body when the share capital is not lower that the minimum amount set for SpAs and the company ahs a share capital equal or exceeding Euro 50.000,00;
  • Not Mandatory – when the statute of the company makes just a general reference to article 2447 or to those law specific cases and the company has a share capital equal or exceeding the minimum amount foreseen for SpAs.

The first clarification will have impact on those Srls that kept the share capital just below the former minimum level for SpAs (Euro 120.000,000), including in their statutes the appointment of the auditing body in case the share capital should have reached or exceeded the minimum level set for SpAs. Those companies have to appoint a new Board of Auditors or a single Auditor or have to modify their incorporation deeds and statutes.

Similarly Srls that on June 25th 2014, had a share capital exceeding the one foreseen for SpAs (Euro 120.000,00) have to keep the Board of Auditors or the single Auditor previously appointed until the share capital will be equal or will exceed the new minimum level of Euro 50.000,00.

In that case, to dismiss the auditing body, the company has to modify its statute, erasing the clause on the minimum share capital foreseen for SpAs. In this case the just cause will probably not exist, as specified during the decree's conversion.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Batini Colombo Saottinis' Tax Team
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions