Shareholders meeting of SRL in Italy
The decisions taken by the shareholders organ
of the società a responsabilità limitata SRL
Powers of the Assemblea dei soci of the limited company in Italy
The Article 2479bis of Italian civil code provides that:
a) the procedures for convening the shareholders' meeting of a SRL are stated in the deed of incorporation; in case this is not provided, the convocation of the meeting is made by registered letter sent to members at least 8 days before the meeting at the address resulting in the company register (Article 2479bis, paragraph 1);
b) the meeting is regularly constituted with the presence of as shareholders as representing at least half of the share capital and can take decisions by an absolute majority.
If the shareholders’ meeting is called to decide on:
- amendments to the deed of incorporation (art. 2480) or
- transactions that involve a substantial change in the corporate purpose or
- transactions that involve the rights of the shareholders,
the decisions must be taken with the favorable vote of shareholders representing at least half of the share capital (Article 2479bis, paragraph 3).
The other legal decision-making model is the written consultation or express written consent, also without prior convocation or contextual presence of the shareholders in the seat of the company (article 2479).
Each shareholders is entitled to participate in the formation of the social will and his vote is valid in proportion to his share (Article 2479, paragraph 5).
In the absence of a different statutory provision, the Italian civil code states that all decisions taken by the shareholders must be taken with the favorable vote of as many shareholders as representing at least half of the share capital (Article 2479, last paragraph).
The shareholders can vote in writing after the proposal has been presented, this is possible also when they approve the document containing the proposal which has been previously consigned.
A decision is considered taken when the entire share capital (all shareholders) has approved it and all the directors and auditors are present or informed of the meeting and no one objects to the discussion of the matter (so called Assemblea totalitaria).
If the deed of incorporation do not provide otherwise, any shareholder may be represented at the meeting by an agent with POA.
The written decisions and minutes of shareholders meeting shall be kept in proper files.
The articles of association must indicate the methods of expression of consent (fax, e-mail with digital signature, etc. ) and, if necessary, provide that for the taking of the decisions all the shareholders must be consulted and at least the prescribed majority is in favor.
In order to make the functioning of the company more efficient and less rigid, the company can alternatively decide on the basis of decisions adopted by means of:
- a mere written consultation: any shareholder has the right to submit a resolution proposal to all the other shareholders; the approval is achieved when the majority expresses itself favorably in writing;
- the consent expressed in writing, for example it is sufficient that there is a single document signed by the consenting members; unlike the consultation, no prior request addressed to all the other members is required, but it is sufficient that the written consent of the majority is formed on a matter, regardless of the involvement of all the members; the subject matter of the decision and the express consent must clearly emerge from the signed documents.
In any case it is advisable to provide, under penalty of lapse, a maximum term within which the votes must be expressed in writing or consent must be received (according to the Triveneto Notary Committee 2004, IB8, a reasonable term for the formation of decisions is 30 days ).
The articles of association can limit these consultations by correspondence only to certain decisions.
The right to convene the meeting belongs to the directors or to the shareholders who represent at least a third of the share capital.
The articles of association, the administrator or administrators or a qualified number of shareholders may confer any type of decision to the shareholders, including those pertaining to the management of the company, subject to the limit of 'art. 2475 paragraph 5 of the Italian Civil Code which reserves to the board of directors (administrative body) the preparation of draft of financial statements and of merger and demerger projects, as well as capital increase decisions in the event of express conferment of this power by the articles of association.
Unlike joint-stock companies, the convening of the meeting is not subject to particular forms of advertising, although it is necessary to ensure timely information on the topics to be discussed. Unless the articles of incorporation provide otherwise (for example fax, e-mail, telegram, etc.) the convocation must be sent by registered letter (there is no need for a registered return letter as proof of shipment counts ) at least eight days before meeting and addressed to each shareholder in the domicile resulting from the register of companies.
The articles of association may provide for a longer or shorter term and / or order that it begins to run from a time other than that of the sending of the registered letter.
A simple verbal convocation is also possible provided that all shareholders, directors and auditors are present, or represented, it is the so-called totalitarian assembly (art. 2479-bis, paragraph 5 of the Italian Civil Code).
Annual meeting obligation
The meeting must be convened at least once a year within 120 days of the end of the financial year. The articles of association may provide a longer term up to a maximum of 180 days when the company is required to approve the consolidated financial statements or in the presence of particular needs as long as they relate to the structure and corporate purpose. In all these cases, the directors must report the reasons for the extension in the accompanying report of the financial statements. It is considered sufficient that the articles of association condition the extension to the existence of the conditions foreseen by the law, without the particular needs being analytically predetermined in the Statute. From time to time, the directors will ascertain their actual existence and motivate the reasons for the extension in the report to the financial statements.
The delay in calling the shareholders' meeting for the approval of the financial statements, beyond the term of 120 days from the end of the year or the longer term (not exceeding 180 days) foreseen by the articles of incorporation, does not imply invalidity of the resolution approving the budget. The only consequence of a late convening of the meeting may be the liability of the directors towards the company or the shareholders, unless it is specified that the late approval may constitute, for the company and the shareholders who have approved the financial statements, ratification of the work of the directors, also with reference to the reasons that led them to a late convocation of the shareholders' meeting (as per Cass. 14 August 1997, n. 7623).
The financial statements, together with the reports of the directors and statutory auditors, must remain deposited in copy at the company headquarters during the fifteen days preceding the shareholders' meeting and until they are approved according to the same rules laid down for the joint-stock company. Failure or late filing of all or some documents constitutes an irregularity in the budget approval procedure and, therefore, causes the invalidity of the relative shareholders' resolution; even if the law refers only to the shareholders' right to view, it seems correct to recognize the right of shareholders to obtain copies and extracts.
Meeting by means of tele-communication (see art. 2370 of the civil code)
The articles of association can legitimately provide that the meeting also meets by means of telecommunication provided that the collegial method is safeguarded and in particular that:
- the place of the meeting is specified in the notice of meeting, that is, the connected places where the attendees will be able to attend; the meeting is considered held in the place where the President and the secretary are simultaneously present; if the articles of association merely provide for the intervention by means of audio-video connections, the notice of convocation must indicate the places organized by the company in which the shareholders will be able to flow;
- compliance with procedural rules is ensured, that is, the President must be able to identify and ascertain the legitimacy of all participants, must be able to regulate the meeting, ascertain and proclaim the results of the vote;
- all participants are allowed to intervene simultaneously and on an equal basis, i.e. follow the discussion, intervene in real time in the discussion of the topics addressed and participate in the vote; however, a method of intervention that does not allow all members - even those connected by tele-communication, to interact with each other, for example audio-only connections (by telephone or radio) or via the internet that does not allow - is not admissible if it does not identify with certainty the legitimacy of the participants and their interventions (except for the possibility of identifying the participant's identity through electronic codes); nor is allowed an intervention in which the members can only attend (and vote) but cannot actively participate in the discussion;
- the secretary or notary must be able to adequately perceive the facts of the meeting which must be recorded in the minutes.
Recipients of the convocation
The convening of the meeting is ad personam therefore it has to be made to each member at the domicile resulting from the register of companies.
For the hypothesis that the shares change after the call has been made, the obligation to call the new owner exists only if the transfer, effectively to the company, took place before the expiry of the eight-day term or of the different term established by the articles of association.
In the event of dissociation between the ownership of the share and the exercise of the right to vote, the call must be sent to the parties entitled to vote and not also to the shareholders; that is to say: to the legal sequestrator of the share, to the trustee of the bankruptcy of the shareholder, to the common representative of the joint holders of shares, to the usufructuary, to the pledgee creditor provided that the voting right is not conventionally left to the shareholders (see art. 2471-bis of the Italian Civil Code).
Agenda of the shareholders meeting
The convocation must ensure timely information on the topics to be discussed. Consequently, the content of the items on the agenda must be clear. The heading "different or various issues" is allowed but must only concern matters of minimal importance .
Place and time of the meeting
The notice of meeting must indicate the day, time and agenda. With regard to the place of the meeting, the meeting meets at the registered office, unless otherwise provided in the articles of association in which case it will be necessary to indicate the place in the convocation notice.
Totalitarian shareholders meeting
In the event of irregular or non-convocation, the meeting can validly deliberate decisions only if it is totalitarian (as per art. 2479-bis paragraph 5 of the civil code). The shareholders' meeting is duly constituted if the entire share capital is represented and if all the directors and members of the board of statutory auditors or if they have been informed of the meeting and no one opposes the discussion of the items on the agenda.
The convocation is free and does not require any formality, the assembly has general competence and can debate any topic if all the members of the directors and auditors agree and no one opposes the discussion (it is therefore possible that the shareholders meeting takes place in the total absence of directors and auditors).
If, even one of those present opposes declaring that he has not been sufficiently informed, the discussion on these matters must be suspended.
In this case it is necessary to proceed alternately:
- to a subsequent regular call;
- to postpone the totalitarian meeting for a suitable term on the subjects for which there was opposition.
Invalidity of decisions of srl members
The decisions of the members of the s.r.l. can be invalid, due to defects of nullity or annullability (Article 2479ter of the Italian Civil Code) as it happens for the s.p.a., as the hypotheses are equivalent.
Nullity (nullità) is a serious defect that occurs immediately, regardless of the evaluation of a judge, who limits himself to ascertain an already accomplished fact.
The annulability (annullabilità) occurs in the presence of less serious defects, it is declared by the judge at the request of an subject who has an interest, without the sentence that cancels a contract, the agreement remains valid, although it contains defects.
- decisions can be challenged within 3 years from the transcription of the resolution in the shareholders' decision book:
if they have an illegal or impossible object, or
if they were taken in the absolute absence of information;
- resolutions that modify the corporate purpose of the company can be challenged without time limits, providing for impossible or illegal activities;
- as in the case of an s.p.a., the recourse against the capital increase, or the reduction of the capital pursuant to article 2445 or of the issue of bonds cannot be proposed after 180 days have passed since the registration of the resolution in the commercial register or, in the event of failure to convene, 90 days from the approval of the financial statements for the year during which the resolution was also partially executed (as per art. 2479ter which expressly refers to art. 2379);
- they can be challenged by any interested party, therefore also by a third party.
There is the annullability of the decisions when:
- they are taken not in accordance with the law or the articles of association;
- they are taken with votes from shareholders in conflict of interest and are such as to cause damage to the company;
- an appeal is proposed by the shareholder who was not in favor or by a director or the board of statutory auditors.
Both in the case of nullity and in the case of annullability, the appeal must be proposed by means of summons in the court where the company is based; the rights of third parties in good faith relating to the canceled or declared decision remain unaffected.
The court may, at the request of the company of the person who brought the appeal, assign a term of 180 days for the adoption of a new decision suitable to eliminate the defect of invalidity.