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Joint stock company in Italy

The società per azioni SpA

Features and rules of the JSC in Italy

The joint stock company (spa) is the most important form of company for large companies.


The characteristics that distinguish the spa are as follows:


- the limitation of the liability of the shareholders to the amount or assets conferred, because only the company with its own assets (the so-called "perfect patrimonial autonomy") is liable for social obligations and not also the shareholders with their own personal assets; it is the strength point of the s.p.a. which allows to state in advance the measure of the business risk;

- the shares (azioni) which are the shareholders participation quota, they can be transferred rapidly;

- the share capital of not less than € 50.000.



The incorporation stage of the Società per Azioni, Joint Stock Company in Italy


The joint-stock company can be incorporated by a unilateral act or by an agreement; in both cases, is necessary the drafting of a deed of incorporation, which is a kind of ID card of the company, and the statute, which contains the rules for the functioning of the company.


In the event that the contents of the two documents are in contrast each other, it will prevail the statute as per last paragraph of art. 2328 cc.


The formation of the joint-stock company takes place in two phases, such as:


- drafting of deed of incorporation (atto costitutivo);

- entry in the Register of Companies.


In order to validly proceed with the establishment of the joint-stock company, it is also necessary to verify:


- the entire subscription of the share capital;

- the payment of 25% of the cash contributions and compliance with the provisions of the civil code for the contributions of goods in kind and credits;

- the existence of government authorizations and other conditions that could be required by special laws to be able to set up the company, in relation to its specific object.


The subscription of the capital of the joint-stock companies can also be made through a bank guarantee or insurance policy.


The signing of the deed of incorporation (atto costitutivo) must necessarily take place, under penalty of nullity, by public act of notary, which can be:


a) simultaneous: where aspiring shareholders simultaneously sign the deed before the notary (it is the most common way of incorporation);

b) subsequent: or by public subscription, in which the establishment takes place at the end, as the conclusion of a series of collection of subscriptions which includes:


- the implementation of the establishment program and its filing with a notary; the program must be compiled by the subjects who take the initiative (promoters), indicating the main provisions of the deed of incorporation and the deadline within which it must be stipulated;

- the effective adhesion of the subscribers, by means of public deed or authenticated private writing; membership must contain the general information and the number of shares subscribed,  thereafter, 25% of the cash contributions will be paid;

- the convening of the shareholders' meeting, so-called constituent assembly where the parties involved ascertain the existence of the conditions necessary to proceed with the establishment of the spa and take a resolution on the content of deed of incorporation; also at this stage it is possible to change the content of the program by unanimous voting of all the subscribers;

- then the actual stipulation of the deed of incorporation is done by the participants in the meeting.

- in the event that at the end the company is really incorporated, the promoters will be reimbursed of the expenses incurred; in the event that the company is not established, the obligations and expenses remain charged on the promoters.


The content of the deed of incorporation of the s.p.a.


The art. 2328 of the Italian Civil Code indicates the content of the deed of incorporation of a s.p.a, as following:


- the surname and first name or denomination (for a legal person), the date and place of birth or the state of incorporation, the domicile or headquarters, the citizenship of the shareholders and any promoters, as well as, the number of shares assigned to each of them;

- the name and the municipality where the company headquarters and any secondary offices are located;

- the activity that constitutes the corporate object;

- the amount of subscribed and paid-up capital;

- the number and any nominal value of the shares, their characteristics and the methods of issuance and circulation;

- the value attributed to credits and assets transferred in kind;

- the rules according to which profits must be shared;

- any benefits granted to promoters or founding members;

- the system of administration chosen, the number of directors and their powers, indicating which of them represent the company;

-  the number of members of the board of statutory auditors;

- the appointment of the first directors and auditors or of the members of the supervisory board and, when required, of the person in charge of carrying out the statutory audit of the accounts;

- the total, at least approximate, amount of the formation expenses charged to the company;

- the duration of the company or, if the company is established for an indefinite period, the period of time, in any case not exceeding one year, after which the shareholder may withdraw.


Registration in the Company Register


The stipulation of the deed of incorporation of the joint-stock company is made by the notary, then, the directors submit - within 10 days, at the competent Company Registry office (that one where the registered office of the s.p.a. is located) - the deed of incorporation, with all the documents proving compliance with the conditions for establishment.


As per art. 2330 cc, the notary who received the deed of incorporation must deposit it, within ten days, at the register office of the companies in which the legal seat of the s.p.a. is established, attaching documents proving the existence of the conditions required.


If the notary or the directors don’t do the deposit, within the term indicated in the previous paragraph, each shareholder can do it at the expense of the company.


The registration of the s.p.a. in the company register must be done jointly with the filing of the deed of incorporation; then, the company register office, after having verified the formal regularity of the documentation, makes the registration of the s.p.a. in the company register.


The nullity of the s.p.a. joint-stock company


The art. 2332 of the Italian Civil Code provides for the company nullity cases, so that, the company is null and void if:


- the signing of the deed of incorporation in the form of a public act is missing;

- the corporate object is illegal;

- in the deed of association or in the statute, there are no indications on the name of the company, on the contributions done by the shareholders or on the amount of the capital subscribed or on the corporate purpose.


As regards the effects, the declaration of nullity does not affect the effectiveness of the actions already carried out in the name of the j.s.c. company after being registered in the Company Register.


Following the declaration of nullity (which must be registered by the directors or by liquidators in the Company Register), the shareholders are not released from the obligation to pay the conferments, until the company’s creditors have been liquidates.



The rights and obligations of the members


The main shareholders rights are:


- to get the profits;

- the liquidation quota;

- the option right;

- right to attend the shareholders 'meeting and right to vote;

- right to challenge shareholders' meeting resolutions.


The main obligations of the shareholders are:


- conferment of contributions and

- execution of accessory services.


The membership of a shareholder of a s.p.a. could cease due to:


- will of the company;

- shareholder decision;

- will of third parties.


The shares, of equal value and indivisible, confer on their owners identical rights, however, this equality must only exist within a single category of shares, given that the company can create different categories.


In addition to ordinary shares, which give normal shareholding rights to shareholders, there may be other categories such as dividend rights or those for service providers.


About the circulation of securities, they follow the rules envisaged for credit securities; limits can be set by the law and the deed of incorporation; kinds of frequently provided clauses are those of approval and pre-emption.


The bonds


The bonds issued by a joint-stock company are financial debts that the s.p.a. assumes towards third parties, from which it has received a loan; the lender has the right both to the repayment of the borrowed sum and to receive agreed interests; in no case can he assume the quality of shareholder; the bonds can be both registered and bearer.


The bondholders can attend in the bondholders' meeting and elect a common representative.


There is also a particular figure of obligation, which is comparable to an intermediate instrument between bonds and shares, it is: bonds convertible into shares, whose purpose is to collect money from all those who would not feel attracted to a simple bond investment but, on the other hand, fear the risks of a pure equity investment.


The shareholders' meeting of the s.p.a.


The shareholders' meeting is an internal decision-making body of the company, which represents the meeting of the shareholders who show their will towards thirds.


In this sense, it is possible to distinguish different types of meeting, on the basis of:


- general meeting: where all the shareholders attend;

- special meeting: where only some categories of shareholders participate (i.e. the shareholders of preference shares);

- ordinary shareholders’ meeting: convened at least once a year, it can take decisions on the normal management of the company;

- extraordinary shareholders' meeting: which deliberates on particular topics, such as amendments to the deed of incorporation, the appointment or replacement of liquidators, theirs powers.


In order to regularly establish the shareholders' meeting, the law provides for compliance with prorated quorums, or the participation of many shareholders who represent certain shares of the share capital; in any case, only those shareholders to whom voting rights are attributed may participate in the meetings.


In the event that the meeting is duly constituted, the agenda can be discussed; after the discussion, the shareholders vote and decide on proposals of resolutions


It can be canceled, pursuant to art. 2377 cc, the decision that was taken with the decisive vote of a subject who is in conflict of interest with the company if any potential prejudice could result.



The administrative body of the s.p.a. in Italy


1) The traditional system of administration of a jsc in Italy provides that the bodies of the spa are:

- the sole director or the board of directors;

- the board of statutory auditors, and an external auditor or external auditing firm.


 2) The dualistic system of administration of a s.p.a. provides for:

- a management board and a supervisory board; while

- the monistic system provides for a board of directors and a control committee.


In any case, the directors are those who make up the management body of the company, with various fundamental functions such as:


- to deliberate on corporate management;

- to convene the meeting of shareholders and establish the agenda;

-to draw up the annual financial statements to be presented for approval at the meeting;

-to take care of the keeping of the accounting books;

- to supervise the regular performance of the management of the company;

- to represent the company towards third parties and in court;

- to set up a report on corporate activity.


The control of the partners in the joint stock company


In the traditional system: the control function of a s.p.a. is made by the board of statutory auditors (collegio sindacale), which is composed by three or five effective members, and two alternates, appointed from among the members or from third persons, at least one effective member and one alternate must be chosen from among the statutory auditors registered in the appropriate bar (albo dei revisori).


In the dualistic system: the control body is the Consiglio di Sorveglianza


Assets for a specific business

The s.p.a. have the possibility of establishing one or more assets, destined exclusively for a specific business .


So that, the company can identify assets, or a part of the corporate assets, which, as a result of the destination wanted by the shareholders, ceases to be a guarantee for the corporate creditors, but becomes the guarantee only of those creditors of the obligations put in place to undertake and to carry out the deal; this provokes a limitation of liability for the obligations deriving from the performance of the specific business to which the separate part of the capital is dedicated.


About the destined assets, these are the following characteristics:


- about those obligations appointed and agreed in order to carry out a specific deal, only the assets destined for this purpose will respond for it;

- the assets destined for a specific business and the related profits will not be included into the general obligations of the company;

- all the assets destined for a specific business cannot be set up for a total value which exceed 10% of the company's net assets;

- the assets that are destined to perform a specific deal must refer expressly to that destination,  under penalty of unlimited company liability for the obligations that may derive from it;

- when the deal for which the assets have been destined is realized or has become impossible, as well as in the event of the bankruptcy of the company, the directors have the task of drawing up a final report to be deposited in the Register of Companies.



Shareholders' agreements in joint-stock companies


The shareholders' agreements of the s.p.a. are agreements that normally accompany the stipulation of deed of incorporation of the company, they have characteristics of autonomy and separation with respect thereto.


The purpose of the shareholders' agreements (patti parasociali) is to regulate the attitude of the shareholders within the company; they are effective only between the parties, they cannot last longer than 5 years and are intended to be stipulated for this duration, even in the event that the parties have provided for a longer term; the shareholders agreement of listed companies (at stock exchange) must be made public.



The withdrawal of the shareholder from the joint-stock company


The Article 2437 of the Italian Civil Code provides that the shareholders have the right to withdrawal from the jsc, in proportion to all or part of their shares, if they have not participated in the resolutions concerning:


- the modification of the clause concerning the corporate purpose, when it allows a significant change in the company's business;

- the transformation of the company;

- the transfer of the abroad of the legal seat;

- revocation of the liquidation status;

- the cancellation of one or more causes of withdrawal provided in the statute;

- the modification of the criteria for determining the value of the share in the event of withdrawal;

- amendments to statute concerning voting or participation rights.

- unless the statute provides otherwise, the shareholders have the right to withdraw from jsc if they have not participated in the approval of the resolutions concerning:


a) extension of the term;

b) the introduction or removal of restrictions on the circulation of shares.


If the company is established for an indefinite term and the shares are not listed on a regulated market, the shareholder may withdraw with at least 180 days' notice in advance; the statute may provide for a longer term, not exceeding one year.


The statute of companies that do not provide for participation at risk capital market may state for further causes of withdrawal.


The causes of withdrawal can be 1)mandatory, 2) derogable and 3) statutory.


1) Mandatory causes


The mandatory causes are those that are governed by the first paragraph of the art. 2437 cc, namely:


- modification of the corporate purpose if this involves a significant change in corporate activity;

- transfer of the legal seat abroad;

- revocation of the liquidation status;

- elimination of one or more causes of withdrawal;

- modification of the criteria used to determine the value of the share in the event of withdrawal;

- modification of the statute on voting or participation rights.


All shareholders who are dissenting, absent, abstained or lacking the right to vote can proceed to withdraw from the company.


Other mandatory causes of withdrawal also constitute the others provided for by the same standard, namely:


if the company is established for an indefinite period and the company is not listed on the stock exchange, the shareholder can always withdraw with at least 180 days' notice; the statute can also provide for a longer period, provided that it does not exceed one year;


    estimate review pursuant to art. 2343 cc;

    introduction or removal of arbitration clauses;

    if the shares are listed on the stock exchange, shareholders who have not participated in the exclusion from the listing may withdraw.


2) Derogable causes


They are those provided by the second paragraph of the art. 2437 cc, namely:


- fixed-term extension of the term;

- introduction or removal of restrictions on the circulation of shares.


3) Statutory causes of withdrawal


The statutory causes of withdrawal are all those that are provided for by the company statute.


For example, the statute may provide for a withdrawal for right cause, on will of the shareholder with at least 180 days' notice in advance.


Limiting pacts


The last paragraph of the art. 24 37 cc provides the nullity of any agreement which has as its main purpose or:


- to exclude or

- make more difficult


the exercise of the right of withdrawal: for example, the statute cannot exclude or make the possibility of withdrawal more expensive; moreover, it cannot limit the right of withdrawal establishing that it is possible only for the modification of some participatory rights, but not for others rights.


The right of withdrawal


The withdrawal consists of a unilateral declaration of the shareholder and, as such, does not require acceptance by the company.


The art. 2437 bis cc established that the withdrawal must be exercised by the shareholder present or absent at the meeting by sending a registered letter within (or a certified electronic mail) 15 days of the registration at the Company Register of the company resolution.


If the cause of withdrawal consists of a fact other than a company resolution, then the deadline is 30 days which starts from the fact that the withdrawing shareholder had knowledge of the fact.


If the company is not listed at stock exchange, in the event that the shareholder's exit is determined by the modification of the deed of incorporation (by introduction or suspension of arbitration clauses), the terms for exercise the withdrawal are 90 days.


Paragraph 3 of art. 2437 bis cc establishes the ineffectiveness of the withdrawal if within 90 days the company revokes the resolution that legitimizes this decision, or if the company dissolution is resolved, indicating a term beyond which the effects of the declaration become intangible.

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