Italian Company Law on Shares and Contributions

Contributions of Assets in Kind or Credits

• Italian Company Law requires a valuation report by an expert.
• Directors must check the report.
• Possible discrepancies in valuation have remedies.
• Contributions without valuation have specific cases.
• Certain transactions may have time limits and excluded operations.
• Liability implications for contributions.

Shares

• Shares represent ownership portions in companies limited by shares (also in s.a.p.a.).
• The sum of shares equals the company's share capital.
• Each share has equal value, reflecting a portion of nominal share capital.
• Shareholders' proportional ownership is tied to their contributions.
• Shares have consistent values, grant the same rights, and are indivisible.
• Shares freely circulate on a certificate-holder basis.
• Nominal value is the value recorded in euros for each share.
• Shares can be issued without nominal value.

Rights of Shareholders

• Shareholder rights can be categorized subjectively in four ways:
  • Rights independent of the number of shares held.
  • Rights needing a certain percentage of share capital.
  • Rights needing a specified holding period.
  • Rights proportional to the number of shares held.
• Ordinary shares have standard rights under law.
• Special shares can be created by statute or later amendments.
• Creation of special categories changes company organization.
  • If there are special categories, resolutions affecting those categories need special approval.
  • Some special categories are determined by law.
  • Others have the company's wide autonomy with legal restrictions.
  • All shares in a category must hold the same rights.
• Special share categories and voting rights.
  • The principle of "one share, one vote" is often the default, but can be modified by charter.
  • Shares without voting rights are possible.
  • Voting rights linked to a specific matter, or an event, can exist (limited to 10 votes in certain cases).
  • Value of voting shares not exceeding 50% of total share capital is often a limit.
  • Voting rights can have limits based on a voting scale, related to shares held.
  • Shares granting multiple votes may exist, but for certain circumstances are limited.
• Special shares related to assets
  • Shares grant a part of the profits (and liquidation)
  • Preferred shares have preference in profit distribution.
  • Deferred shares are last in line for losses.
  • For listed companies, dividends can be increased.
  • Tracking shares are connected to a business sector's performance.
• Savings shares in certain companies
  • Issued without voting rights, with specific conditions.
  • Related rights in case of trading exclusions.
• Also available are workers' shares, dividend-bearing shares, and shares tied to additional obligations.

Circulation of Shares

• Shareholdings can be represented by share certificates (art. 2346, par. 1, c.c).
• Rules for transfers differ based on whether certificates exist.
  • Open company structures have different rules than listed companies.
  • If certificates aren't used, transfer rules from the contract are used (art. 1406 et seq., c.c.).
• Transfer of listed shares uses an electronic system that records transactions.
  • Transactions in the name of buyer and seller by financial intermediaries.

Restrictions to Share Transfers

• Legal restrictions often relate to the valuation of contributions.
• Share valuation must be reviewed by directors before transfer.
• Shares with special or ancillary services might need board approval.
• Restrictions as laid out in articles of association
  • Clauses that ban transfers or have time limits.
  • Pre-emption clauses allow existing holders to buy shares first.
  • Acceptance clauses.
  • Redemption clauses
• Restrictions from shareholders' agreements (blocking syndicates)
• Separate rules for registered companies (not bearing share certificates).

Company Transactions Involving Own Shares

• Subscription of own shares are not permitted except for certain very specific reasons.
• Effects from violations of constraints on share acquisition.
• Detailed rules and procedures for purchasing existing shares.
• Rules about circumstances when own shares can be bought or sold.

Share Certificates

• Share certificates are records showing share ownership.
• They are essentially securities in contract form (titoli causali), connected to contractual agreements.
• Rights and responsibilities extend beyond those directly noted on the document.