27/06/2017

STOCK COMPANIES

The basic principle governing both  types of companies is that only the

company is liable with its assets for its obligations:

 the liability of the shareholders/quota holders is therefore limited to the amount paid in, or to be paid in, as corporate capital.

This is different from a partnership, where partners are in principle liable without limit for the partnership's obligations.

Stock Company (SpA)

 

The main feature of a public company is that  the  capital is divided into freely transferable and indivisible  shares of equal  value  (the  nominal  value  of each  share corresponds to  a fraction  of the  entire  share capital), conferring equal rights, both  administrative (e.g. voting rights) and  economic (e.g.  Right to a share of net profits).  In addition to ordinary shares, the company’s articles of association may provide for particular classes of shares granting special rights, also in respect of losses.

 

If permitted by the company’s articles of association, the capital contribution may also be represented by assets (either tangible, including receivables, or intangible).  Contributions in kind must be fully paid in at the time of subscription and the contributor must provide - in accordance with article 2343 of the Italian Civil Code - a sworn appraisal prepared by a court-appointed expert. In no event can the overall value of the contribution be less than the aggregate increase in share capital.

 

Shareholders of a SpA can be either natural or juridical persons, or Italian or foreign.  At least one shareholders’ meeting must be held each year, to approve the company’s annual financial statements, no later than 120 days or, in exceptional circumstances, no later than 180 days after the close of the financial year.

 

Extraordinary shareholders’ meetings must be held to approve matters such as amendments to  the  articles  of association, the  winding-up  of the  company  (including the  appointment of  liquidators,   their  substitution  and  their  powers),  and  mergers  or  similar  corporate reorganizations; whereas  ordinary  meetings approve matters connected with the  ordinary course of the company’s business.
The  management of the  company is  assigned to  directors, who  handle  all  matters and transactions necessary  or  advisable for  the  attainment of  the  corporate purpose. 

 

The management may lie with a sole director or a board of directors; in the latter case, the number of directors is established by the articles of association. Their management powers involve a duty to take all necessary and appropriate steps to attain the corporate purpose, as well as to ensure compliance with the law, including the preparation of the draft annual financial statements.

 

SpAs must also appoint a board of statutory auditors (collegio sindacale), formed of three or five statutory auditors and two alternate auditors. The main duty of the board  of statutory auditors  -  as set out  in  article  2403 of the  Italian  Civil Code  -  is  to  supervise  compliance with  the  law  and  the  articles  of association. 

 

They also have to verify that the company’s organization and administrative and accounting structures are adequate and work properly. Accounting controls are the responsibility of the board of statutory auditors or an audit firm.

 

Besides the governance system described above, two further systems are available for SpAs. In the first (so-called sistema monistico or one-tier model, taken from Anglo-Saxon culture), management and control lie with a board of directors and a committee appointed from amongst the   members of the   board   itself.  The management of the   company is the exclusive responsibility of the board of directors, whilst the management control committee supervises the adequacy of the company’s organizational structure, internal control system and administrative and accounting system, as well as its capacity to represent the acts of management correctly. 

 

The  committee also  performs any additional  function  assigned to it by the  board of directors and,  in particular,  liaises  with the  auditors or board  of statutory auditors with regard  to controls on the accounts.

 

The second (so-called modello dualistic or two-tier   model) provides for two corporate bodies: a management board and a supervisory board.  The management of the company is entrusted exclusively to the management board, which must do everything necessary or advisable for the attainment of the corporate purpose.

 

The supervisory board is entrusted with the functions of the board of statutory auditors and with those functions reserved, in the traditional model, to the shareholders’ meeting.

Neither model includes a board of statutory auditors: accounting controls are carried out by an audit firm.

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