ITALY Law and Practice Contributed by: Francesco Di Carlo and Filippo Raynaud, FIVERS Studio Legale e Tributario
1. Corporate Governance Requirements 1.1 Corporate Forms and Governance Requirements The Italian legal system encompasses a variety of cor - porate/business forms, each with differing levels of liability, governance, and capital requirements. A preliminary distinction may be drawn between: • partnerships ( società di persone ), where partici - pants are often also directors and have unlimited liability; • capital companies ( società di capitali ), where direc - tors may also be non-participants and participants have limited liability (save for extraordinary circum - stances provided for under applicable law); and • “hybrid” companies, which have two categories of participants: participants with unlimited liability and management powers ( accomandanti ) and partici - pants without management powers and limited liability. Partnerships are mostly used for small-sized enter - prises and may be set up as: • società in nome collettivo (SNC), a general partner - ship where all partners have unlimited liability); and • società semplice (SS), the simplest form of partner - ship used primarily for professional or agricultural activities. An SS is not allowed to engage in com - mercial business activities and its partners have unlimited liability. Capital companies may be set up as: • società a responsabilità limitata (SRL), a limited liability company mostly used for small-to-medium- sized enterprises (SMEs), where corporate capital is divided into quotas (not shares), the participants are referred to as “quota-holders” and corporate governance rules are flexible; and • società per azioni (SPA), a joint stock company mostly used by medium-to-large-sized enterprises and those wishing to access capital markets, where corporate capital is divided into shares and corporate governance rules are more rigid and
must follow one of three possible governance models (see 3.1 Board Structure ). “Hybrid” companies may be set up as: • società in accomandita semplice (SAS), where corporate capital is divided into quotas (and not shares); and • società in accomandita per azioni (SAPA), where corporate capital is divided into shares. The categories above are indicative, as Italian cor - porate law allows the corporate governance rules to be further customised within a company’s by-laws. Capital companies may also be used for small-sized enterprises with a direct involvement of participants in the management (typical of partnerships). Further distinctions may be drawn within some of the different corporate forms indicated above, depending – for instance – on the corporate purpose (eg, if the company pursues a lucrative or mutualistic purpose), business activity (eg, an SPA may be used as collec - tive investment undertaking in the form of a SICAF (ie, investment company with fixed capital) or a SICAV (ie, investment company with variable capital)), and access to capital markets (ie, non-listed and listed companies). It is also possible to set up a company in Italy in the form of societas europea or European Company, pur - suant to Council Regulation No 2157/2001. For sake of clarity, in this chapter we will focus on the rules applicable to SPAs and ordinary SRLs (ie, not considering the special rules applicable to so-called simplified SRL, the SME SRL and the Innovative Start- Up SRL), as these are the most common forms of corporate organisations. The analysis will be limited to rules applicable to the generality of Italian companies, without regard to spe - cial sector laws. Corporate governance rules applicable to Italian com - panies listed on an Italian regulated market (hereinaf - ter simply referred to as “listed companies”), will be considered, not including a comprehensive analysis
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