The competitiveness decree1 (Decreto competitività), was published in the Italian Official Gazette on 20 August 2014 andcame into force on 21 August 2014.
The main provisions regarding enterprises are described, in brief, below.
SMEs with listed shares
The Decree encourages Small Medium Enterprises (SMEs) to become listed companies. In particular:
- The Decree introduces the definition of SMEs with listed shares in the Consolidated Finance Act (TUF – Testo Unico della Finanza), which envisages a more favourable regime in comparison to that applicable to large listed companies. According to article 1, paragraph 1, letter w-quarter of the TUF, SMEs with listed shares are enterprises which, according to their most recent financial statements, and before their listing on the stock exchange, have a turnover of up to 300€mln or a market capitalization below 500€mln. Enterprises with listed shares that have exceeded both limits for 3 fiscal years or for 3 consecutive calendar years cannot be considered as SMEs..
- The Decree allows for the possibility of SMEs modifying their by-laws’ by introducing a threshold for a mandatory takeover bid between 25% and 40% (respectively lower and higher than the 30% ordinarily provided for other companies). The purpose of this new flexible measure is to give SMEs a choice when setting a threshold that can mitigate the risk of losing control of the company (i.e. lowering the threshold up to 25%) or allow for the entry of new shareholders into the company (i.e. increasing the threshold up to 40%). Shareholders that have not voted on the resolution modifying the by-laws in order to approve a different threshold for the takeover bid can exercise the right of withdrawal according to the provisions set forth in articles 2437-bis, 2437-ter and 2437-quarter of the Italian Civil Code.
- The Decree allows the by-laws of companies to issue shares with multiple-voting rights (azioni di voto maggiorato) up to a maximum of 2 votes per share provided that such shares are owned by the same shareholder for more than 24 consecutive months from the registration in the relevant register. The purpose of this provision is to give a boost to the listing procedure whilst allowing the controlling group of the company to maintain their position as interested shareholders in the company. In fact, the risk of losing control of the company following admission to the stock exchange is one of the main factors that currently discourages the listing of SMEs.
Other regulatory provisions concerning enterprises
Corporate capital: the minimum capital for incorporation of a joint stock company (S.p.A.) has been lowered from €120,000.00 to €50,000.00.
Board of Statutory Auditors in limited liability companies: the provision contained in article 2477, paragraph 2 of the Italian Civil Code, according to which the appointment of the Board of Statutory Auditors is mandatory if a limited liability company has a corporate capital no lower than the one set forth for joint stock companies, has been repealed. As a consequence of this modification, limited liability companies will be obliged to appoint a Board of Statutory Auditors only when such a company (i) has to prepare consolidated financial statements; (ii) controls another company obliged to carry out audit (iii) exceeds, for two consecutive financial years, the thresholds set forth in article 2435-bis paragraph 3 of the Italian Civil Code.
Liquidation value of joint stock companies’ shares in case of withdrawal: Previously, as outlined in Article 2437-ter, paragraph 3 of the Italian Civil Code, the liquidation value had to be determined by making exclusivereference to the arithmetic average of the closing prices on the stock exchange during the six months preceding the publication of the notice convening the meeting whose resolutions give rise to the right of withdrawal. Now, the word exclusive has been deleted and the Decree allows that by-laws of listed companies can supplement the other mechanics contained in paragraph 2 and 4 of article 2437-ter to determine the liquidation value of the shares (i.e. the value is determined by the directors of the company having regard to the asset consistency of the company or market value of the shares, or by-laws can indicate other elements of the company balance sheet that should be taken into account in order to determine the value of the shares) provided that the value resulting from the application of the alternative mechanics is not lower than that deriving from the closing prices arithmetic average as described above. Such new flexibility will allow companies to more accurately determine the price of shares so as to afford a fair treatment for the shareholders exercising the withdrawal right.