Italian law does not grant legal persons with the right to
be appointed as company directors. Therefore, most
practitioners and commentators have considered this lack of
regulation as an implicit prohibition of the appointment as
directors of all persons other than individuals.
However, over the past years a different interpretation of
the provisions set forth in the Italian Civil Code has brought
part of the experts to consider the appointment of legal
persons as directors both lawful and appropriate.
The corporate law reform introduced in 2003 had the
opportunity to solve the dispute, but unfortunately the Decree
no. 6 did not answer to the question.
Certainly, this has been a missed opportunity for
What is the opinion of Notary Publics?
Until few months ago, the mentioned debate was at the
theoretical level only. Neither legal entities were company
directors nor equity holders planned to appoint them. In fact,
no notary would allow such appointment by executing the deed of
incorporation and the By-laws.
Therefore, the decisive change came by the supervisory body
of the Italian notaries public: both the Consiglio
Nazionale del Notariato (i.e. the supervisory entity) and
the Commission for the Study of Corporate Law of Consiglio
Notarile of Milan have admitted the possibility to appoint
legal persons as company directors.
In particular, the Commission for the Study of Corporate Law
codified in its Statement no. 100 the principle previously
issued by the Consiglio Nazionale del Notariato. This
statement provides that "A section in the By-laws of
either a corporation ["S.p.A."] or a limited
liability company ["S.r.l."] that provides for the
right to appoint a legal entity as director of the company is
valid and binding".
These new opinions are based on interpretation of sections
of the Italian Civil Code as amended by the corporate law
Certainly the strongest argumentations are the
Currently pursuant to the corporate law reform,
corporations can hold equity interests in companies which
determine unlimited liability;
These interests are those held in a company other than
Therefore, since the legislator provides a corporation
with the right to act as director of a company, there is not
any appreciable reason to exclude the same right with regard
to a corporation.
The above mentioned opinions by Consiglio Nazionale del
Notariato and by the Commission for the Study of Corporate
Law are not binding but, in any case, have strong persuasive
authority and will certainly carry significant weight with
lawyers and, more importantly, with the Courts.
Opportunities Offered by the New Interpretation
The decision of the Consiglio Nazionale del
Notariato opens up new scenarios and demonstrates that
Italian corporate law has begun to offer very flexible tools as
so other legal systems traditionally considered more elastic
Currently, it should be now possible to incorporate
companies having as sole purpose to act as directors of other
In addition, multinational companies, depending on the
circumstances, may decide to incorporate a vehicle to act as
director in all the jurisdictions where a legal person can be
appointed as director. If appropriately structured, this could
lead to a more streamlined management of the subsidiaries.
Certainly, the solution given by the mentioned influential
Bodies may allow lawyers to suggest to their clients to appoint
legal persons as company directors in light of the above
However, when doing so, lawyers should also take into
account that many holes presently remain in the regulation of
the legal person as director. In this context, as a
consequence, lawyers should take particular care to ensure that
the By-laws fill in appropriately all holes left in the
original text of the By-laws.
Furthermore, it is equally desirable that the legislator
provides for an accomplished regulation on this matter so that
Italian corporate law is entirely into line with legal systems
(eg, the Netherlands, France and England) which expressly allow
a legal person to be appointed as a director.
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.
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