The impact on the Italian Corporate Law of the new Italian Code of Business Crisis and Insolvency

Pursuant to the Law No. 155 of October 19, 2017 delegating the Italian government to reform state provisions governing business crisis and insolvency, the Legislative Decree No. 14 was enacted last January 12, 2019 (“New Code”). While most of the new provisions on business crisis and insolvency will enter into force next August 15, 2020, some provisions came into force on March 16, 2019. These provisions essentially cover (i) the organizational structure of Italian limited liability companies and (ii) their shareholders’ liability.

Article 2475 of the Italian Civil Code (“ICC”) regarding the governance of limited liability companies was amended. The limited liability companies’ management is now subject to the provisions contained in Article 2086 of ICC. In particular, according to the newly established regime, such companies’ management shall be performed only by the directors. The Italian National Council of Notaries recently issued an opinion on such new provision stating:

  1. It is intended to have effects only at the organizational level, i.e. directors are exclusively entitled to set up an organizational, administrative and accounting structure which is considered appropriate to the nature and size of the company. Therefore, according to this opinion, it may be possible to provide specific management rights of individual shareholders in bylaws or certificate of incorporation (pursuant to Article 2479, paragraph 1, of the ICC);
  2. The new provision does not imply any obligation to immediately amend existing limited liability companies’ by-laws.

The New Code clarified on the extension of Article 2934 of the ICC to limited liability companies. The new version of article 2476 of the ICC so-called “Directors’ liability” contains a new paragraph providing for the directors’ liability toward creditors in the limited liability companies. In particular, such new provision provides their responsibilities in two instances:

  1. When they do not fulfil their obligations concerning the maintenance of the assets of the company;
  2. The right of a creditor of the company to claim directors’ liability when corporate assets are insufficient to satisfy their claims even when the company may have been waived to claim such liability against directors.

Compliments of AEM Carnelutti, a member of the EACCNY