ITALY Law and Practice Contributed by: Guido Alberto Inzaghi, Ivana Magistrelli, Silvia Gnocco and Gabriele Paladini, SI – Studio Inzaghi
3.5 Legal Requirements Before an Entity Can Give Valid Security The granting of security over real estate assets in favour of third parties, within a group of com - panies, is always subject to the existence of a corporate benefit and to certain restrictions in financial assistance situations. Corporate benefit should exist, and be verified, on a case-by-case basis. In the case of joint stock companies, financial assistance is generally prohibited but it is pos - sible to provide security over real estate assets subject to compliance with certain steps, for - malities and restrictions (see 3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders ). Limited liability companies are subject to stricter rules. In particular, Article 2474 of the Italian Civil Code regulates transactions on their quotas, preventing companies from making transactions to purchase their quotas or provide securities for their purchase or subscription. 3.6 Formalities When a Borrower Is in Default In the case of a borrower default, the accelera - tion of the loan and enforceability of the securi - ties are regulated by the provisions of the Italian Civil Code and Legislative Decree No 170/2004 of 21 May 2004 (as the case may be) as well as the facility agreement and the security docu - ments. The lender will notify the borrower that a default event has occurred. The lender may withdraw from the facility agree - ment and/or accelerate the payment obligations
Under Article 2358 of the Italian Civil Code, a joint stock company may not, directly or indi - rectly, obtain loans or provide securities for the purchase or subscription of its shares, unless certain conditions are met. Limited liability companies are subject to strict - er rules, as detailed in 3.5 Legal Requirements Before an Entity Can Give Valid Security . 3.4 Taxes or Fees Relating to the Granting and Enforcement of Security Under Presidential Decree No 601/1973 of 29 September 1973( “Decree No 601/1973” ), some loans and related securities granted can be exempt from the ordinary taxation regime. The borrower can pay a substitute tax, which is an all-inclusive tax at a rate of 0.25% of the principal amount of the loan. In the cases mentioned in 3.10 Taxes on Loans , the parties can expressly exercise the option of applying the substitute tax regime to securities. If the parties do not exercise this option, the security package will be subject to the ordinary taxation regime, including: • notary fees (in case of notarial securities); • stamp duty; • cadastral tax; • registration tax; • mortgage tax; and • governmental duties. The deed of pledge over quota granted by a third person other than the debtor, incurs registration tax at the rate of 0.5%, which is calculated on the taxable base represented by the amount secured by the pledge.
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