Notaries of Milan and of the Campania Region gave opposite views on the applicability of the obligation to make contributions in cash and in full, as envisaged by Sections 2643 and 2643-bis of the Italian Civil Code with specific reference to the phase of incorporation of “simplified” and “reduced-capital” limited liability companies, also to capital increase up to 10,000 Euros. Opposite views were likewise expressed with respect to the eligibility of banker’s cheques as means of payment of contributions in cash in limited liability companies.

1. Foreword: opposite views of the Notaries of Milan and of the Campania Region as to contributions in limited liability companies

The Companies’ Commission of the Notarial Board of Milan and the Notarial Committee of Campania took extremely polarised positions on the interpretation of two provisions regarding contributions in limited liability companies. More specifically, the subjects at issue are as follows: (a) the applicability, in case of capital increase for valuable consideration not exceeding 10,000 Euros, of the prohibition to make contributions other than in cash and of the obligation to fully pay up as envisaged by Sections 2643 and 2643-bis of the Italian Civil Code for the phase of incorporation of “simplified” and “reduced-capital” limited liability companies; and (b) the possibility to use banker’s cheques for payment of cash contributions in limited liability companies.

2. The prohibition to make contributions other than in cash and the obligation to fully pay up contributions in “simplified” and “reduced-capital” limited liability companies
Sections 2463, par. 4, and 2463-bis, par. 2, No. 3, of the Italian Civil Code provide that the capital contributions required upon incorporation of “simplified” and “reduced-capital” limited liability companies should be in cash and in full. In this regard, scholars have wondered as to whether said provisions, specifically envisaged for the incorporation stage, should also apply to capital increase for valuable consideration insofar as it does not exceed the 10,000 euros threshold (and, therefore, insofar as the requirement for application of the special rules for “simplified” and “reduced-capital” limited liability companies is met). A first view was expressed by the Companies’ Commission of Notarial Board of Milan, which, construing the above provisions in a literal way, by maxim No. 130 excluded the applicability of such provisions to the specific case of capital increase for valuable consideration. In such case, therefore, the general rules governing limited liability companies should apply, in accordance with the specific reference under Sections 2463, par. 5, of the Italian Civil Code and 44, par. 4, of Decree Law 83/2012. By contrast, the Notarial Committee of the Campania Region came to opposite conclusions in its maxim No. 21: the prohibition to make contributions other than in cash and the obligation to fully pay up contributions as envisaged for reduced-capital limited liability companies should apply not only at the stage of incorporation but also in case of capital increase not exceeding the 10,000 euros threshold. In support of such view, it is argued that the rationale underlying the greater strictness of the rules governing the incorporation of the above sub-types of limited liability companies with corporate capital not exceeding 10,000 Euros lies in the lower security involved in their reduced capital, which led the Italian legislator to impose the prohibition and requirement referred to above. In plain words, to counterbalance the possibility of incorporating limited liability companies with corporate capital not exceeding 10,000 Euros, the Italian legislator required the relevant corporate capital to be made only of immediately and fully available funds. The same requirement would still apply insofar as the corporate capital does not exceed the 10,000 euros threshold, upon both incorporation and any subsequent capital increase, with the consequence that the above-mentioned provisions would also apply, by way of analogy, to transactions involving capital increase for valuable consideration.

3. Banker’s cheques as a method of payment of contributions in cash in limited liability companies

The maxims set out by the Companies’ Commission of the Notarial Council of Milan and by the Notarial Committee of the Campania Region are also conflicting in terms of the interpretation of the new version of Section 2464 of the Italian Civil Code, as amended by Section 9, par. 15-bis, of Decree Law 76/2013, converted into Law 99/2013. More specifically, a question was raised as to the eligibility of banker’s cheques as means of payment, to be mentioned in articles of incorporation, for making a 25% (or full, in case of incorporation by unilateral deed) cash contribution. The Notaries of Milan replied in the affirmative to such question, in their maxim No. 148, primarily based on the argument that banker’s cheques are regarded as “means of payment” under Italian anti-money laundering law. Furthermore, they recalled that, under Section 3 of Royal Decree 1736/1933, banker’s cheques cannot be issued if the drawer has no funds available with the drawee: this leads to the conclusion that any regularly issued banker’s cheque may be considered as an “adequate means of payment that enables the beneficiary to collect the amount specified in the banker’s cheque”, although the Notaries themselves acknowledged that the beneficiary has no direct claim against the Bank. On the contrary, maxim No. 23 of the Notarial Committee of the Campania Region gave a negative response, also in this case drawing the reader’s attention to the rationale underlying the statutory provision at issue, the reference to “deposit” of contributions under Section 2464 of the Italian Civil Code being indeed intended to secure effective payment of the relevant share of corporate capital, also in order to protect third parties’ legitimate expectations. For such purposes, banker’s cheques are not deemed sufficient to secure the deposit required by the provision at issue: while cashier’s cheques are secured by the statutory bail lodged by issuing institutions under applicable law (thus, ensuring the effectiveness of such “deposit”), banker’s cheques lack any similar means to secure the existence of the relevant funds, with the consequence that payments by banker’s cheque are deemed inadequate to release shareholders from their obligation to pay the sums to be deposited as contributions.