ITALY Law and Practice Contributed by: Maurizio Marullo, Giorgio Vagnoni, Claudia Marongiu and Pasquale Ambrosio Cepparulo, LAWP Studio Legale e Tributario
Transfers of assets from the co-ventures and the JV, if made within 24 months of its incorporation, are sub - ject to approval from the shareholders’ meeting and require a sworn appraisal certifying the value of the assets. In any event, in the transfer of assets involving the co-venturers and the JV, it is often advisable to prepare an appraisal to certify the fair value of the sale. If the JV transfers assets to a co-venturer, potential conflicts of interest may arise, regardless of whether the assets were initially contributed by the co-ventur - ers or developed by the JV. To mitigate these risks, it is essential to establish a fair market value for the assets, ideally supported by an independent auditor’s valua - tion (as mentioned above). Additionally, if the purchas - ing co-venturer is also a legal representative of the JV, the transaction may be considered self-dealing. In such cases, the conflict-of-interest procedures out - lined in 7.3 Conflicts of Interest should be followed. As specified in 9.1 Termination of a JV , in the event of termination of the JV, the assets owned by the company (whether originally contributed to the com - pany by the co-venturers or originating from the JV itself) will be liquidated to pay off the creditors (if any). Any remaining assets will be then distributed among shareholders in proportion to their membership inter - est in the JV. Therefore, the transfer of JV assets does not only need to take into account the decisions of the co-venturers, but also the interests of the company’s creditors, who may ultimately have claims over those assets, in the event the JV faces financial distress. 9.3 Exit Strategy Italian law does not impose specific statutory rules on JV exits, but provisions under the Italian Civil Code set the framework within which share transfers must operate.
In S.p.A.s, shareholders may freely transfer their shares unless the bylaws provide otherwise; however, absolute transfer bans are not valid, except for lim - ited timeframes (not exceeding five years) and in so far there are not discretionary. Buy-back clauses are also allowed, though they are subject to strict statu - tory limits. In S.r.l.s, transfer restrictions and exit mechanisms can be structured more freely and are commonly embedded in the articles of association. Italian law permits statutory withdrawal by a member in certain cases (eg, transfer restrictions exceeding two years, changes to the corporate purpose, merger, or exten - sion of duration), and contractual withdrawal rights can also be included in the JV agreement. Overall, exit strategies are primarily subject to nego - tiation, allowing parties to tailor provisions in the JV agreement to meet commercial objectives. The most common exit clauses typically include one or more of the following: • rights of first refusal; • tag-along and drag-along rights; • put and call options; • deadlock resolution mechanisms leading to exit (eg, Texas or Russian roulette clauses); and • IPO exit or third-party global sale procedures. To ensure enforceability, it is essential that exit claus - es are clearly defined, proportionate, and properly reflected in the by-laws and/or in the shareholders’ agreement. Furthermore, under Italian laws, if exit clauses force a member to transfer its shareholding upon occurrence of a certain event (eg, in the case of call options, drag-along), the exiting member must be granted fair and equitable consideration for the transfer.
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