Companies Limited by Shares (SPA) Overview

Soft Law

• Model law bringing together best practices from member states' legal systems, serving as a model for national legislation.
• Optional, non-binding adoption.
• Creates harmonization through a flexible instrument.

Companies Limited by Shares (SPA)

• Specific type of limited liability company.
• Liability for corporate obligations limited to the company's assets.
• Participation in the company's capital represented by shares.
• Main features: legal personality, limited liability of shareholders, well-defined corporate organization, capital represented by shares.
• Evolution: Civil Code (1942), Law n. 216/1974, Testo unico dell'intermediazione finanziaria (d.lgs. n. 58/1998), 2003 corporate reform for non-listed companies.
• Types (based on Article 2325 bis, c.c): close companies, those that resort to the risk capital market (open companies or listed companies).
• Special rules for Italian issuers of widely distributed financial instruments focusing on public distribution. Criteria for public distribution: more than 500 shareholders holding at least 5% of the share capital, or exceeding two of the three limits specified in Article 2435-bis, first paragraph of the Civil Code.

Incorporation Procedure

• Two-step process: drawing up the instrument of incorporation and registration in the Business Register.
• Abrogation of judicial approval (2000) leading to faster procedure. Legal personality acquired only after registration.
• Two ways to draw up: simultaneous, with shareholders acting as initiators; public contribution (Art. 2333-2336 c.c.).
• Act form: public deed.
• Compulsory information in the instrument of incorporation: type and name of company, objects of the company, authorized/subscribed capital, rules for appointment and administration of company representatives, duration.
• Additional information: registered office, nominal value/number of shares, special conditions regarding share transfers, amount of subscribed capital.
• Detailed aspects regarding the content of the instrument for incorporation (listing various types of information, such as the details on the value of shares, the amount of capital, etc).
• Necessary information for the registration with the company’s register.
• Special consideration of the timing, details in accordance with laws and procedures applicable to the jurisdiction, particularly, concerning the fast procedures in 2000.

Incorporation - Minimum Capital

• Minimum capital (required before company can be incorporated/authorized to operate).
• Minimum capital amount of €50,000.
• Shareholders must subscribe full share capital.
• At least 25% of the cash contributions must be paid initially. Or the full amount, in case of unilateral corporate act.

Articles, Provisions, and Effects of Company Nullity

• Conditions for nullity: the instrument of constitution was not executed, the company has unlawful objects, no indication of the company's name in the instrument of constitution, omission in stating company's capital amount or objects of the company.
• Responsibility of company representatives (directors) with regard to nullity and the shareholders' meeting.
• Requirements for maintaining the validity of a resolution.
• Time limits for contesting the voidance of resolutions in company statutes.

Company Shareholders' Meeting

• Ordinary and extraordinary meetings are distinguished based on the content discussed.
• Ordinary meetings deal with the approval of financial statements, appointments and removals of directors/auditors.
• Extraordinary meetings handle bylaws amendments and matters explicitly defined by law.
• Quorum (minimum share capital represented) and majority requirements for valid meetings and decisions vary depending on type of meeting and regulations laid out in bylaws.
• Participation at meetings: shareholders with voting rights and others who have the right to exercise the vote.
• Rules on how to call a meeting, agenda (the order of which items are up for discussion), attendance and voting methods (telecommunications, etc).
• Detailed consideration of who can call the shareholders meeting, when the meeting has to be required, where it must take place, and the procedural rules regarding how the meeting should be held.

Administrative Body

• Functions and responsibilities of the administrative body for listed and other companies.
• Structure of the administrative body: sole director or board of directors (with executive committees and managing directors depending on whether or not the company is listed).
• Powers/responsibilities of directors based on specific roles and nature of different types of companies. Key roles are defining, appointment, duration/termination of office, conflicts of interest, liability.
• Management control committee (for one-tier system), which takes on the duties of the board of statutory auditors and reporting responsibilities.
• Detailed analysis of the legal provisions and practices regarding directors' responsibilities, including what their liabilities are towards the company, creditors, and third parties, including their duties involved in the company's activity
• Specific provisions in regards to appointment, termination and other applicable regulations that apply to directors.

Financial Statements

• Requirements for financial statements (format, substance, and standards to be met).
• Requirements on the structure of financial statements.
• Key information required (balance sheet, income statement, cash flow statements, explanatory notes).
• Timeline for preparation and submission of financial statements to shareholders' meetings.

Amendments to Bylaws

• Procedure for modifying bylaws/instruments: extraordinary shareholders' meeting, notary checks, and Business Register filing.
• Rules and regulations for formal changes in the company documentation, detailing relevant deadlines and other specific criteria.

Withdrawal of Shares

• Grounds for withdrawal (mandatory/bylaws/other provisions).
• Procedure for exercising withdrawal rights (time limits, notification, etc)
• Criteria for determining the share value upon withdrawal.
• Detailed consideration of grounds, procedures, and criteria regarding the valuation of shares.

Bonds

• Description of bonds in a corporate context.
• Comparison between bonds and shares (distinguishable features, interest rate, etc)
• Rules for bond issuance (procedural requirements, reporting requirements).
• Detailed information (limits for bonds, convertibility into shares, different types of bonds).
• Detailed consideration of bonds, including their legal structure, and how they differ from shares.

Explore the crucial aspects of Companies Limited by Shares (SPA), including its characteristics, liability structure, and legal framework. This quiz covers historical legislation influencing SPAs and differentiates between close and open companies. Test your understanding of this specific type of limited liability company and its applications in Italy.