Riassunto esame Italian and european company law, Prof. Serafin Giulia, libro consigliato Italian company law, Davide mascagni

Italian and European company law

Companies

Organizations of persons and means created by private autonomy for the joint exercise of a productive activity. Companies (2082) → organization that provides business activity.

Criteria for identifying a business

• Organization: planning and coordinating a series of activities to develop the enterprise.
• Economic method: characterized by the method → cost covers revenues.
• Professionalism: exercise business activity must not be occasional.

General statute of the entrepreneur → These definitions are applicable to all entrepreneurs:

• Discipline of the business assets (azienda)
• Distinctive signs
• Competition law
• Consortia
• Antitrust Law (l. n. 287/1990)

Special statute of commercial entrepreneur

Includes registry regulation. In order to start a business: discipline principle of determination of application of entrepreneur → Effectiveness. Important for business → register in commercial register (and cancel when it ends).

Distinction of civil code of business activities

• Object
• Size
• Person who carries out the business

Agricultural entrepreneur (Art. 2135)

Agricultural entrepreneurs are not subject to accounting and insolvency law. Insolvency laws are not applicable to:

• Not assets over 300,000$ for 3 years before the bankruptcy
• Not gross revenue over 200,000$ for 3 years before the bankruptcy
• Have less than 500,000$ of total debts

Person who carries out one of these activities: land, sylviculture, animal breeding, and related activities.

Connected activities

• Transformation
• Manipulation
• Conservation
• Commerce
• Exploitation of products obtained
• An essentially agricultural activity
• Supply of goods and services using instruments or resources related to agriculture (subjective or objective connection)

Subjective: person carries out the activity in the business linked with the product produced inside the business.

Objective: using most of the product produced inside the business to carry out my activity.

Small entrepreneur

Direct cultivators of the fund, the artisans, small traders, and those engaged in a professional activity in his own or family’s labor.

Individual entrepreneur and enterprise carried on using a collective form

• Partnerships
• Companies
• Public enterprises - associations
• Foundations

Special entrepreneur status

• 2188 legal publicity and business register
• 2214 accounting register
• 2203 statutory agency
• Insolvency law

Legal publicity and business register (Art. 2188)

Allows access to information useful for comprehending the company. Registration has been extended to small enterprises, simple companies, and agricultural entrepreneurs.

Ordinary session includes:

• Partnerships and corporations
• Cooperative corporations
• Consortiums with external activity and consortium companies
• Companies incorporated abroad with administrative or secondary offices on Italian territory
• European economic interest group
• Public entities whose exclusive or main purpose is a commercial activity
• Individual (non-small) business entrepreneurs

Special section includes:

• Agricultural enterprises
• Small enterprises
• Simply company
• Artisan enterprises
• Innovative start-up
• Certified incubator
• Innovative SME
• Social enterprise
• Entity of management and regulation of this group

Registration is made automatically when it is created if the registration is compulsory. The ordinary one has the function of constitutive and normative effect:

• Constitutive effect: power to give the birth of joint stock company
• Normative effects: once registration is effective, the joint stock company exists

Accounting records (Art. 2214)

An entrepreneur engaged in commercial activity must keep a journal and the inventory book. Inventory book: always do it, is a systematic analytical method of registration periodically. Must be kept for 10 years and can be used as evidence.

Statutory agency (Art. 2203)

• Factor (institore): person who manages commercial activities
• Attorneys in fact (procuratori): power to perform acts in the enterprises
• Clerks (commessi): limited power to represent the enterprise

Business (Art. 2555) - Azienda

A set of assets organized by an entrepreneur for the purpose of carrying out the entrepreneurial activity.

Business transfers

• The form of the transfer contract
• The non-competition of the transferor
• The succession in business contracts
• The business credits and debts

Distinctive signs (Art. 2563, etc.)

• Business name - ditta
• Banner - insegna
• Trademarked - marchio

Partnerships and companies (Art. 2247)

Partnerships (società di persone):

• Simple partnership (società semplice - s.s.)
• General partnership (società in nome collettivo - s.n.c.)
• Limited partnership (società in accomandita semplice - s.a.s)

Companies (società di capitali):

• Companies limited by share (società per azioni - s.p.a.)
• Limited liability companies (società a responsabilità limitata - s.r.l.)
• Partnership limited by shares (società in accomandita per azioni - s.a.p.a.)

Common features

• Joint exercise of business activity (=simple partnership) → can be used for agricultural enterprises
• Contribution granted by members → forms of good or services, cash, credit → conferimenti iniziali
• Profit sharing → applied only for partners

Main differences

• Companies → legal personality = the company is a legal person
• Partnerships → legal subjects

Capital

Contributions: performance that members obligate themselves to make, in order to join the partnership/company and may be allocated in the form of goods and services. Contribution risk capital → form share capital → number that compose base → modify share capital necessary approbation. Cash for the company → in order for members to fulfill the only obligation of partners, shareholders, etc., is the obligation to promise contribution.

Legal personality

Having a legal personality means that the company is a legal entity, so it is a different subject from its owners → separate assets of business and members. Partnership is not a legal person, but is still a legal subject, that means:

• Art 2266 → unlimited and joint liability for partnership debt
• Partial segregation: creditors can’t satisfy credit on members only if business assets can’t recover the business debt (only in a partnership)
• Solidal obligation → more debtor and 1 creditor → each debtor is obliged to give the entire sum of money and react on the other partners in order to get their part

Simple partnership (SS) and general partnership (SNC)

Art 2295 → general partnerships shall:

• The last name and first name, domicile, citizenship
• The name of the partnership
• The partners who have the administration and representation of the partnership
• The headquarters of the partnership and any branch offices
• The corporate purpose
• The contributions of each partner, the value attributed to them and the method of valuation
• The services to which the work partners are obligated
• The rules according to which profits are to be distributed and the share of each partner in profits and losses
• The term of the partnership

Failure of the inscription: general partnerships have to be inscribed in the public register (Art. 2296); if the procedure fails the relations between the company and third subjects are managed as a simple partnership (Art. 2297).

Contribution and liabilities

• Solidal responsibility → solidal obligation (different from the two types of companies)
• Leonine pact → accord for which one or more partners are excluded from all profits or losses
• Beneficium excussionis → SS doesn’t operate automatically, in general partnership (SNC) in order to avoid the cash payment of the partners, a partner has to indicate to the creditor the company’s assets that can be easily converted in liquidity in order to satisfy his credit

The limitation of the responsibility of a member is possible only in form of internal deal and is enforceable against third parties.

Corporate activity

• Disjunctive management (Art. 2257) → anyone of the owner has the power to take decision, in case of objections (diritto di veto) → decide the majority
• Joint management (Art. 2258) → if management is entrusted to several partners jointly, then all manager-partners must give their consent for company operations to be carried out

Dissolution of partnership → single social relationship

• Death of the partner
• Withdrawal (recesso) of the partner
• Exclusion liquidation of the quota of the leaving partner in case of dissolution

In case of death → There are three ways (Art. 2284):

• Liquidation of the quota to the heirs
• Dissolution of the partnership
• Continuation of the partnership with the heirs (it requires the consent of the partners and heirs) the right to withdraw has no temporal limitation and has to be communicated in the partnership agreement

The case of exclusion:

• Causes related to breach of social obligations
• Causes related to the loss of the legal capacity
• Causes related to the contributions

Limited partnership - SAS

General partners are jointly and unlimitedly liable for the obligations of the corporate obligations, and limited partners are liable limited to the share conferred.

Principle of trust: (Art. 2314) the company acts under a business name consisting of the name of at least one of the general partners and the limited partner, who allows his name to be included in the partnership name, is liable before third parties unlimitedly and jointly with the limited partners for partnership obligations.

Failure to register → irregular limited partnership; Art. 2317. Until the partnership is registered in the business registry, the relations between the partnership and third parties shall be governed by simple partnership rules; however, limited partners are liable only to the extent of their quota.

Administration (Art. 2218)

The administration of the partnership can only be given to general partners. The transfer of quota: The limited partner's share is transferable by death. Unless otherwise provided in the instrument of incorporation.

Dissolution and liquidation

• Dissolution to all partners → Art. 2272
• By the expiration of the term
• By the achievement of the corporate purpose or by the supervening impossibility of achieving it
• By the consent of all members
• When the plurality of members ceases to exist, if within six months this is not reconstituted
• For other causes provided for in the partnership agreement
• (5.bis) for the opening of the controlled liquidation procedure
• Liquidation → Art. 2275
• The liquidation is done by one or more liquidators, appointed with the consent of all the partners or, in case of disagreement, by the president of the court
• Payment of corporate debts → Art. 2280
• The liquidators may not distribute the corporate assets even partially, among the partners, until the creditors of the partnership are paid or the sums necessary to pay them are set apart
• If the available funds are insufficient to pay the corporate debts, the liquidators may demand from the partners the payments still due on the respective quotas and, if necessary, the sums required, within the limits of their respective liability
• Allocation of assets → Art. 2282
• Having extinguished the corporate debts, the remaining assets are allocated to the repayment of contributions
• Cancellation of the partnership → Art. 2312
• Having approved the final liquidation balance sheet, the liquidators shall apply for the cancellation of the partnership from the business register

Purpose of ECL (Power to regulate → European Union)

• Facilitation
• Improve transparency
• Protect interests on shareholders

Freedoms in EU markets:

• Sustainable development of Europe based on balanced economic growth and price stability
• Highly competitive social market economy
• Full employment and social progress
• High level of protection and improvement of the quality of the environment
• Promote scientific and technological advance

Internal UE market

Legal bases → Art. 26 TEU:

• Measures with the aim of establishing or ensuring the functioning of the internal market
• Area without internal frontiers in which the free movement of goods, persons, services, and capital

Freedoms of the market → Art. 56 TEU

This implies eliminating discrimination on the grounds of nationality and, if these freedoms are to be used effectively, the adoption of measures to make it easier to exercise them, including the harmonization of national access rules or their mutual recognition.

Establishment → Art. 49 TEU

• Restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited
• Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage a business company operate in a member state is subject to the company law of the member state

Criteria of connection from company

• Incorporation theory → apply national law where it has its registered seat (sede legale)
• Real seat theory → national law applicable → law where the company has the headquarter

Extract → Art. 50 TFEU

In order to enjoy the freedom of establishment and provide services granted to the TFEU we need a common legal framework on Company Law and it does not necessarily imply the unification of the legislations of member states into a single uniform law. It is sufficient that national legislations share common basic principles. UE gives members direction → Laws have to be harmonized:

• Regulation (shall generally apply)
• Directive (shall be addressed, but the decision is of the member state)
• Decision (decision binding)

The mean of regulation is to establish common rules. EU institutions use directly applicable to companies and firms established under the law of member states.

European Model Company Law Act

• Soft law
• Model law that brings together best practices from member states' legal systems, from which all the member states can take inspiration
• Optional, non-binding adoption
• The purpose is to provide a basic outline to be used as a model for national legislation and to create harmonization through a malleable tool

Company limited by shares

For its obligation only the company is liable with its assets (Art. 2315). Corporate participation is represented by shares (Art. 2346).

Main futures

• Legal personality
• Limited liability of shareholders
• Corporate organization
• Shares

There are 2 types of companies:

• Closed
• Open (resort to the risk capital market):
• Shares are widely held among public
• Listed companies

All these 3 types have their own rules, and there are rules also for all jointed.

Incorporation

1. Drawing up the instrument of incorporation
2. Registration of the instrument of incorporation in the Business register

Abrogation has to be approved by judge → 2 ways of abrogation:

• Simultaneous incorporation
• Incorporation through public subscription

Public transcription:

• Setting up a program (prospectus)
• Subscriptions
• Meeting of subscribers
• Stipulation of the incorporation instrument

Incorporation instrument

• Agreement or unilateral act (Art. 2247)
• Form of act: public deed

Conditions

• Minimum capital amount (Art. 2327)
• Art 2329

Before registration → no legal entity, we have a contract (obligations to the owners of the company):

• Liability of those who acted
• Liability of the company (necessary and unnecessary operations)

If the company is not registered → Nullity of Companies limited by shares.

Purposes of the discipline

• Certainty of legal transactions
• Stability of corporate organization

But, in order to maintain the stability:

Once the Company is registered, it can only be declared void in a limited number of cases, which must be strictly interpreted.

Consequences of nullity

1. The happening of a cause of nullity of the company is treated as a cause of dissolution of the company
2. The nullity of a company doesn’t undermine the effectiveness of any actions taken on behalf of the company after its registration
3. The cause of nullity can be eliminated

Italian company law → single member company rules

1. Liability of the sole shareholder before the company is registered (2331, par. 2, c.c.)
2. Contract between the company and the sole shareholder (2362, par. 5, c.c.)
3. Have to stay in contribution boundaries
4. Need to disclose the acts

The breaching of 3 or 4 Art 2325rd th →

Contributions

Represent the true value of the company →

• Rules: In a Company limited by shares can be contributed only cash or assets in kind or credits. It is not possible to contribute the provision of a service or work (Art. 2342)
• Unless is provided, contribution only by cash → there are different laws depending on the nature of the contribution →

Cash contribution

1. Obligation to pay 25% of the cash contribution at the time of incorporation of the company
2. Payment of the residual contributions
3. Transfer of shares not fully paid up (Art. 2356)
4. Rules for non-payment contributions (Art. 2344)

Other contributions

• Valuation report by an expert
• Check by the directors (non-transferability of shares)
• Possible non-concordance of value/remedies
• Contributions with