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Partnership forms in Italy

Consorzio, Associazione in Partecipazione, Associazione Temporanea di Imprese, Rete di Imprese

Consortium of companies, Contractual Joint Venture, Temporary Association of enterprises ("Contract), Network of firms in Italy

The Consortium of companies (Consorzio)


Article. 2602, paragraph 1 of the Italian Civil Code, defines the consortium as the contract by which <<several entrepreneurs set up a common organization for the discipline or for carrying out certain phases of the respective companies>>.


The consortium of companies is a contract signed between several companies with the following purposes and characteristics:


- the consortium contract is not a merger of companies, it does not involve the absorption of the contracting companies into a unitary body;

- it is an agreement between a group of companies that have the purpose of creating a common organization in favor of the participating companies;

- the consortium aims to meet the coordination needs of production and exchange;

- the consortium is a more solid structure that offers participating companies greater opportunities for success and expansion;

- the participating companies have the economic purpose of obtaining cost savings and increased profits;

- the participants in the consortium must be enterprises (also agricultural);

- the contracting entrepreneurs can also carry out different economic activities;

- within the consortium it is mandatory to provide: a management body, a deliberative assembly, identification of the subjects that represent with third parties is needed;

- the duration can be established by the parties; failing this, the consortium is deemed valid for ten years;

- outside these specific phases, individual companies retain their autonomy;

- the consortium contract which must have a written form by a notary deed, registration in the register of companies, release of VAT number.


Article. 2603 of the Italian Civil Code states that the contract must indicate:


- the object and duration;

- the legal seat of the office;

- the obligations assumed and the contributions due by the consortium members;

- the powers of the bodies of the consortium also with regard to representation in court;

- the conditions for the admission of new consortium members;

- cases of withdrawal and exclusion of members;

- sanctions for failure to fulfill consortium members' obligations.


If the consortium has as its object the quota of production or exchanges, the contract must also establish the quotas of the individual consortium members or the criteria for determining them.


If the articles of association defer the resolution of questions relating to the determination of quotas to one or more people, the decisions of these can be challenged before the court, if they are manifestly unfair, or erroneous, within thirty days of the news.


Types of consortium:


1) anti-competitive consortium:


- they are contracts concluded by entrepreneurs carrying out similar activities;

- for the purpose of regulating mutual competition, by setting limits, in the common interest;

- they can, for example, as provided for by Article 2596 of the Civil Code, provide for the quota of production and exchanges between competing companies, this agreement must be limited to a limited area and cannot last more than 5 years;


2) inter-company consortium:


- they are contracts aimed at creating a collaboration between entrepreneurs to carry out certain phases of the business;

- several entrepreneurs create a consortium for the common management of production, distribution, advertising etc.




The Partnership (Associazione in Partecipazione)


The “associazione in partecipazione” is kind of partnership (or also contractual joint venture), it is a contract by which a party (associating partner) confers to another (associate) a share of the profits of its enterprise, or of one or more business, towards the reception of a specific contribution (art. 2549, 1st paragraph).


Essential elements of the contract - placed in a synallagmatic relationship - are therefore:


a) the contribution from the associate; as a rule, the contribution consists of a sum of money but it can also consist of the provision of certain goods or the simple enjoyment of them, and the provision of services;


b) the attribution of a profit share by the associating partner; in accordance with art. 2553, the associate - unless otherwise agreed - participates in the losses to the same extent in which he participates in the profits, however the losses cannot burden to an extent greater than his contribution.


Through the contribution, therefore, the associate participates in the risk of the business; in fact, if the business results in a loss, he could:


- lose the capital invested;

- not receive any income for the good it has contributed, or

- work without compensation.


The associate does not become a shareholder of the firm of the associating partner, but remains his creditor: the relationship between them, in fact, remains purely internal.


The partnership does not even create an employment relationship between the associating partner and the associate because:


- in it lacks the dependence link (typical of an employment relationship) and remuneration (profit sharing, in fact, does not have a remunerative nature);

- to the associate can be given the right to control the management and in any case he has the right to get the report.


Differences from company


Partnerships are distinguished from companies by the following characteristics:


- there is no a capital owned by the partners, because there is the absolute lack of social assets;

- the firm of the associating partner continues to remain owned only by him; therefore the contribution of the associate becomes part of the assets of the associating partner, who has the right to sign contract obligations with third parties;

- the associating partner is the only responsible towards third parties (art. 2551);

- the management of the partnership is charge of the associating partner; the associate can, within the limits established by the contract, exercise a control activity and has the right to receive the yearly report (art. 2552);

- the participation of the associate in profits and losses is governed by the contract; in any case, however, the losses that affect him cannot exceed the value of his contribution (art. 2553).


The contract of associazione in partecipazione can’t be way to hide a subordinate employment relationship, the establishment of partnerships that provide for the contribution of work by natural persons is not allowed (as per the previous regulations, under certain conditions, allowed work contributions ); the work performance, however, can be the subject of the contract when the associate is a legal person.




The "Contract" (Associazione Temporanea di Impresa, ATI)


It is a temporary association of firms, it is another kind of partnership (or also contractual joint venture), whose features are as follows:


- in English this agreement is called “Contract”;

- it is a temporary and occasional cooperation between several companies that, without losing their own autonomy;

- the partner companies come together without creating associations or common organizations;

- each company gives a mandate collective, free and irrevocable (this is a special mandate with representation) to one of them (the so-called "group leader company");

- the group leader company has the representation of the other companies acting in the name and on behalf of them;

- the purpose of the ATI is that of the joint construction of a remarkable work entity or joint management of a relevant business (e.g. the construction of a residential center, urbanization works, etc.);

- usually the establishment of temporary associations between companies is generally aimed at participating in public tenders or at the stipulation of agreements with private individuals;

- several companies that carry out different activities joint together in the completion of large works, both private and public, for example: for the establishment of a real estate complex, for which it is necessary to carry out masonry, electrical, plumbers etc.;


Despite their wide diffusion, there is not a skilled legal discipline: from the point of view of law, these temporary associations between companies represent an atypical contract (contratto atipico), without specific rules, but it is valid according to the general principle for which it is possible conclude contracts other than those provided for by the laws, provided that they are aimed at regulating interests worthy of legal protection (art.1322).


In any case, there is no creation of a new company, or in any case, of a new subject distinct from the companies participating in the meeting, it is just a particular operating body without legal subjectivity and which does not imply the rise of a corporate entity.



The Network of enterprises (Rete di imprese)


The Network of enterprises (Rete di Imprese) agreement is very similar to the consortium of companies.


The Article 3 of Legislative Decree 5/2009 (and following amendments till Legislative Decree 154/2016) introduced the so called Rete di Imprese, it is a network contract where:


- two or more companies, on the basis of a common network program, undertake to collaborate in predetermined forms and areas relating to the exercise of their businesses

- or to exchange information or services of a nature industrial, commercial, technical or technological or

- even to jointly carry out one or more activities falling within the scope of their business;

- in order to increase mutual innovative capacity and competitiveness on the market;

- each of the companies maintains its individuality and its presence on the market.


It is a legal agreement available to companies that, while remaining autonomous, decide to collaborate for the purpose described above.


There is no need for a geographical link between the participating companies, but it is important that they do carry out similar activities and that collaboration is possible to increase their competitiveness.

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