Communication of shareholders’ will may occur via means other than those defined for the Shareholders' Meeting, and without obligation to meet at a specific location.
“Italian civil code – Art.2479: 3. L'atto costitutivo può prevedere che le decisioni dei soci siano adottate mediante consultazione scritta o sulla base del consenso espresso per iscritto. In tal caso dai documenti sottoscritti dai soci devono risultare con chiarezza l'argomento oggetto della decisione ed il consenso alla stessa. 4. Qualora nell'atto costitutivo non vi sia la previsione di cui al terzo comma e comunque con riferimento alle materie indicate nei numeri 4) e 5) del secondo comma del presente articolo nonché nel caso previsto dal quarto comma dell'articolo 2482-bis oppure quando lo richiedono uno o più amministratori o un numero di soci che rappresentano almeno un terzo del capitale sociale, le decisioni dei soci debbono essere adottate mediante deliberazione assembleare ai sensi dell'articolo 2479-bis.”
Aside from cases in which shareholders' will has to be expressed in a shareholders' meeting under the terms of the Italian Civil Code art. 2479, paragraph 4 ie:
- concerning changes to the Articles of Association
- concerning operations involving a significant change to the company purpose set out in the Articles of Association or a significant change to shareholders' rights
- in the cases listed under art. 2482-bis, when, following a loss which reduces the share capital by more than a third, said loss is not then itself reduced by a third within the following period
- upon request of one or more directors or a number of shareholders which represents at least a third of the share capital
art. 2479, paragraph 3, provides for the possibility that communication of will may occur via means other than those defined for the Shareholders' Meeting and without obligation for the shareholders to meet at a specific location.
The methods available are:
- written consultation
- written consent.
The law specifies neither the methods nor the timeframes for the decision-making process, leaving the shareholders free to determine the technical methods and procedures to be employed for a valid resolution during drafting of the Articles of Association. Therefore, the Articles of Association contain the relevant sections on procedures outside the shareholders' meeting.
First of all, the preparatory formalities are defined, both for written consultation and written consent. This consists in defining the party responsible for communicating the need for a decision regarding a specific point, with prior decision proposal. The document may, for example, define that the delegated party be the Chairman of the Board of Directors, a shareholder or a number of shareholders representing a specific quota of share capital. In the absence of formal provisions, the rules regarding calling of the ordinary shareholders' meeting shall apply, under the terms of art. 2479 of the Italian Civil Code and as specified in the Articles of Association.
A second aspect to be defined concerns the methods for sending and circulation of decision proposals with regard to the shareholders. For convenience, methods which allow traceability of correspondence should be used, ie. fax, email, registered letter with return receipt.
A third significant aspect for consideration is the timeframe within which shareholders must express their will. As it is inadvisable that shareholders' decisions be made a significant amount of time after the proposal, in order to guarantee the efficiency of the decision-making system and maintain the relevance of the decision expressed, a suitable timeframe for expression of will is 30 days from the receipt of the proposal. In case of a failure to respect the specified timeframe, the entire proposal shall expire. After the said period, it will therefore be necessary to move forward with a new procedure that will commence with a new decision proposal on the part of the delegated party.
It should be noted that civil corporate regulations do not provide for specification and definition of the aforementioned aspects in the Articles of Association. Therefore, all methods employed collectively by shareholders are valid, providing they guarantee participation of all shareholders in the decision, as well as providing suitable preventive information and being able to clearly document the subject in question and the decision expressed by shareholders.
The two methods mentioned for decision making outside of the shareholders' meeting differ in the procedures used for shareholders to express their will.
In the case of written consultation, the will of the shareholders is expressed using a ‘referendum’ model. Each shareholder is invited to express their vote in favour or against a motion put forward by the delegated party, which may not be altered by the voting shareholder. The shareholder’s only alternative to these two options is to abstain from voting.
The decision proposal put forward should contain three characteristic elements:
- the subject of the decision
- the content and effects of the decision
- indication of the shareholders voting in favour, voting against or abstaining, with possible indication on request of the reason for abstention or voting against the motion.
Written consent, on the other hand, is a far more flexible method for decisions taken outside the shareholders' meeting. In the absence of specific regulations, any form of decision adopted will be considered valid, as an alternative to written consultation. For example, documents signed by all of the shareholders expressing their favour, which meet the validity requirements, whether they regard capital representation, timeframes or formalities, are recognised.
The final important aspect to consider is the resolution quorum, ie. the minimum quota of capital required for a valid representation of the ownership.
In this regard, the reference regulations defined in art. 2479, paragraph 6, provide that in the absence of other specific provisions contained in the Articles of Association, the decision of the shareholders is valid if it represents a majority of at least half of the share capital. The Articles of Association may raise the said quorum, setting higher majorities and even arriving at the requirement of complete representation of the share capital or, on the other hand, they may reduce the quorum, offering greater freedom in order to increase the reactivity of decision-making processes in relation to management aspects.
Alternatively, with reference to the two aforementioned procedures for decision making outside the Shareholders' Meeting, it is possible to set different quorums for cases of written consultation and written consent.
The Articles of Association should also cover other significant aspects, ie. subsequent communication to each shareholder of valid expression of will, in addition to the obligation to note any decisions reached in the shareholders' book of resolutions, following standard civil procedure under the terms of art. 2478, paragraph 1, point 2.