Important changes to Italian company law after the conversion into law of the so-called ‘growth decree’

The Decree 91 of 24 June 2014, known as the 'Decreto Competitività', introducedinter alia, a set of measures to change Italian company law. The Decree was ratified by the law no. 116 of 11 August 2014 and was published in the Italian Official Gazette on 20 August 2014. The law came into force on 21 August 2014.

Below is a summary of some key changes that are most relevant for Italian company law. 

Corporate capital: the minimum capital requirement for joint-stock companies (‘società per azioni’) has been reduced from €120,000 to €50,000.

Board of Statutory Auditors in limited liability companies (‘società a responsabilità limitata’): under the provision formerly contained in the Italian Civil Code, the appointment of an auditor was mandatory if a limited liability company had corporate capital no lower than that one set forth for joint stock companies. This provision has been repealed and, as a consequence of this deletion, a limited liability company will be obliged to appoint an auditor (irrespective of its corporate capital) only when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.

Withdrawal and liquidation value of listed joint stock companies’ shares: under the old provision contained in the Italian Civil Code, the liquidation value in case of withdrawal from listed joint stock companies’ had to be determined making exclusivereference to the arithmetic average of the closing prices on the stock exchange during the six months preceding the publication of the notice of call convening the meeting, which adopts the resolutions giving rise to the right of withdrawal. The new provision deletes the word 'exclusive', thus allowing by-laws of listed companies to supplement other mechanics to determine the liquidation value of the shares (eg the value may be determined by the directors of the company with reference to the asset consistency of the company or market 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.

Multiple-voting rights: a completely new provision for Italian company law now allows the by-laws of non-listed joint-stock companies to provide for the issuance shares with multiple-voting rights granting up to three votes per share (multiple voting may be limited to certain matters only or contingent upon certain conditions). In the event of subsequent listing of the shares, the multiple votes will be maintained and new multiple voting shares may be only issued through share capital increases, merger or de-mergers.

Increased voting rights: listed companies may not issue multiple voting shares, but the new provisions allows the by-laws of listed joint-stock companies to grant increased voting rights (up to two votes per share) to the company’s shareholders under the condition that the shares have been held by the same person for a period of at least 24 months. The additional voting rights are forfeited in case of sale of the shares to which such additional voting rights are associated. The resolution to amend the by-laws in order to contemplate increased voting does not recognise a withdrawal right for the shareholders who do not concur to such resolution.  

Corporate Governance of Banks – new provisions

On 6 May 2014, the Bank of Italy issued new supervisory provisions in accordance with the CRDIV Directive relating to the corporate governance of banks which had not yet been implemented in Italy.

The provisions introduce many novelties with regard to the composition of the Board of banks and the formation of committees. The main ones are:

  • a limit of 15 members, with the possibility for exceptions which must be justified;
  • the presence on the Board of a number of independent members that is at least equal to a quarter, following the determination in the by-laws of a single notion of independence; 
  • the chairman of the board of directors must have a non-executive role and, for said reason, he must not be a member of the executive committee;
  • the three obligatory internal board committees (appointments, risks, remuneration) must be made up of 3 to 5 members, all of whom must be non-executive members and a majority of whom must be independent;
  • the presence on at least one internal board committee of a board member that is elected from the minority.

The new provisions require a progressive adaptation of the relevant provisions of the by-laws by 2017.