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Questions and Answers
Which of the following is NOT a consequence of nullity under Directive (EU) 2017/1132 Article 12?
Which of the following is NOT a consequence of nullity under Directive (EU) 2017/1132 Article 12?
- The law of each Member State may dictate additional consequences.
- The company must be wound up.
- Holders of shares remain obligated to pay up any outstanding capital.
- Shareholders are not required to pay any outstanding capital. (correct)
Under Italian Company Law, what is the impact of a company's nullity on actions taken on behalf of the company after its registration?
Under Italian Company Law, what is the impact of a company's nullity on actions taken on behalf of the company after its registration?
- The actions are deemed valid only if they involve transactions with third parties.
- The effectiveness of such actions is unaffected by the nullity. (correct)
- The validity of such actions is subject to review by the company's creditors.
- Such actions are automatically invalidated.
Which of the following scenarios is NOT a cause for a company to be declared invalid after registration?
Which of the following scenarios is NOT a cause for a company to be declared invalid after registration?
- Failure to comply with national laws concerning minimum paid-up capital.
- Failure to draw up the instrument of incorporation as a public deed.
- Failure to provide indication in the instrument of incorporation of the total amount of capital subscribed. (correct)
- Failure to provide indication in the instrument of incorporation of the company's objects.
What is the primary purpose of 'contributions' as described in the text?
What is the primary purpose of 'contributions' as described in the text?
What distinguishes ordinary shares from special shares?
What distinguishes ordinary shares from special shares?
Which of the following statements about shareholder rights is FALSE?
Which of the following statements about shareholder rights is FALSE?
In which characteristic do close companies limited by shares differ from open companies?
In which characteristic do close companies limited by shares differ from open companies?
What is the effect of the legal personality attributed to companies limited by shares?
What is the effect of the legal personality attributed to companies limited by shares?
How is the nominal value of shares defined?
How is the nominal value of shares defined?
Flashcards
Nominal Value of Shares
Nominal Value of Shares
The monetary amount representing each share of the share capital.
Ordinary Shares
Ordinary Shares
Shares that provide typical rights provided by law to shareholders.
Limited Liability
Limited Liability
Shareholders are only liable for corporate obligations up to their investment.
Corporate Personality
Corporate Personality
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Close Companies
Close Companies
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Grounds for Company Invalidity
Grounds for Company Invalidity
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Consequences of Nullity
Consequences of Nullity
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Single-Member Company Regulations
Single-Member Company Regulations
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Company Incorporation Requirements
Company Incorporation Requirements
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Contributions in Shareholder Equity
Contributions in Shareholder Equity
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Study Notes
Company Liability
- Liability for corporate obligations is limited to the company's assets.
- Company capital is represented by shares.
Main Features of Companies Limited by Shares
- Legal Personality: Independent legal entity, separate from shareholders.
- Limited Liability: Shareholders' liability is limited to their investment in the company.
- Corporate Organization: Well-defined structure and management.
- Shares: Represent ownership and participation in the company.
Types of Companies Limited by Shares
- Close Companies: Shares are not publicly traded.
- Open Companies: Shares are traded on a public market.
Incorporation
- Legal personality is acquired upon registration.
- Incorporation can be simultaneous (shareholders contribute and sign together) or through public subscription (raise capital from the public).
- Public subscription involves steps like a program, subscriptions, meetings, instrument stipulation, and registration in the business register.
Share Capital
- At least 25,000 Euro minimum capital requirement to incorporate or authorize to operate.
- Contributions are typically made in cash, although assets in kind or credits are also possible.
- A minimum of 25% of the cash contribution is due at the time of incorporation.
Instrument of Incorporation
- It can be an agreement or a unilateral act, in the form of a public deed.
- It must contain the company's type, name, objects, authorized capital (if any), subscribed capital, and a statement regarding the company’s business.
Compulsory Information
- The instrument of incorporation or statutes must include details like the company's type and name, objects, subscribed/authorized capital, rules for sharing, management, and duration.
- Information on any changes or amendments to these documents must also be provided.
Registration
- Registration is required in a business register.
- The legal effect of registration creates a separate legal entity.
Liability of Promoters
- Promoters are liable for actions taken before registration.
Nullity
- A company's contract before registration will fall under contract law.
- After registration, a company can only be considered null under specific (limited) circumstances.
- Grounds for nullity include issues with the constitution, unlawful objects, incomplete information in the instrument, and member incapacity.
- Nullity entails liquidation of the company.
Single Member Companies
- Single-member companies can be incorporated, but specific rules may differ from those for other entities.
Consequences of Nullity
- The occurrence of nullity is treated as a cause of dissolution; nullity does not diminish actions taken on the company's behalf after registration;
- Causes of nullity can be removed.
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