Italian Company Law Overview
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Questions and Answers

Which of the following accurately describes the purpose of the European model company law act?

  • To create uniform tax regulations for all companies in the EU.
  • To offer a non-binding model for national legislation promoting harmonization. (correct)
  • To provide a prescribed legal framework that must be adopted by all companies.
  • To enforce mandatory legislation across all member states.

    • What is a key characteristic of companies limited by shares, specifically SPAs?

  • They possess legal personality with perfect autonomy regarding assets. (correct)
  • Their corporate capital is represented through bonds.
  • They must distribute all profits to shareholders annually.
  • Shareholders have unlimited liability for company debts.

    • Which statement correctly identifies criteria for open companies that resort to the risk capital market?

  • They typically have shares that are not publicly traded.
  • They require a minimum of 1,000 shareholders to operate.
  • They are companies held exclusively by private investors.
  • Their shares are widely held and may be listed on regulated markets. (correct)

    • What is a key feature of share capital in a company?

    <p>It acts as an asset guarantee for creditors.</p> Signup and view all the answers

    Which statement correctly describes the liability of partners in a partnership?

    <p>Partners are liable with their personal assets for all partnership debts.</p> Signup and view all the answers

    According to Article 2-bis of the Regolamento emittenti Consob, which group of issuers is defined as having shares widely circulated among the public?

    <p>Italian issuers with over five hundred shareholders holding at least five percent collectively.</p> Signup and view all the answers

    What must occur for a partnership agreement to be amended?

    <p>All partners must provide consent unless a different agreement is specified.</p> Signup and view all the answers

    What is a fundamental aspect of the incorporation procedure for companies limited by shares?

    <p>Completing two main steps, including drawing up the instrument of incorporation.</p> Signup and view all the answers

    Which of the following describes the liability of shareholders in a company limited by shares?

    <p>Liability for corporate obligations is limited to the company’s assets.</p> Signup and view all the answers

    What differentiates companies from partnerships regarding legal personality?

    <p>Only companies are recognized as having legal personality.</p> Signup and view all the answers

    How is share capital utilized in determining partners' financial rights?

    <p>It dictates the amount of profit partners are entitled to based on their contribution.</p> Signup and view all the answers

    What type of companies does the regulation regarding issuers of financial instruments generally apply to?

    <p>All companies limited by shares and specific close companies.</p> Signup and view all the answers

    What is one of the main rules regarding the separation of share capital?

    <p>Share capital must be kept distinct from the company's assets and liabilities.</p> Signup and view all the answers

    What is an obligation of partners under joint and several liability?

    <p>Any partner can be pursued individually for the total debt.</p> Signup and view all the answers

    What form must the instrument of incorporation take for regular partnerships?

    <p>It should be a public deed or certified written private deed.</p> Signup and view all the answers

    Which of the following elements is NOT required in the instrument of incorporation for a general partnership?

    <p>The percentage of ownership for each partner</p> Signup and view all the answers

    What is the presumption made regarding partner contributions if they are not expressly stated in the instrument of incorporation?

    <p>Partners must each contribute equally to the partnership object.</p> Signup and view all the answers

    Which of the following types of contributions is explicitly recognized under the Italian Civil Code for partnerships?

    <p>Contributions of assets in kind</p> Signup and view all the answers

    What are partners prohibited from doing with the partnership assets according to article 2256 of the Italian Civil Code?

    <p>Using assets for personal purposes without consent</p> Signup and view all the answers

    If a partner violates the prohibition on using partnership goods for non-corporate purposes, what may happen?

    <p>Exclusion from the partnership</p> Signup and view all the answers

    What information regarding partners must be included in the partnership agreement?

    <p>Last name, first name, domicile, and citizenship</p> Signup and view all the answers

    Which component of the partnership agreement determines how profits are shared among partners?

    <p>The rules for profit distribution</p> Signup and view all the answers

    In the case of simple partnerships, what is the regulation regarding the partnership asset?

    <p>No specific regulations exist for simple partnerships.</p> Signup and view all the answers

    Under what circumstance can the prohibition on using partnership assets for different purposes be overridden?

    <p>With the consent of all partners</p> Signup and view all the answers

    Which of the following statements best describes the significance of the contributions in a general partnership?

    <p>They form the initial asset of the partnership.</p> Signup and view all the answers

    What does Art. 2303 of the Civil Code state regarding profit distribution among partners?

    <p>Losses must be compensated before profit distribution.</p> Signup and view all the answers

    Under what condition can a partner be reimbursed for their contributions according to Art. 2306?

    <p>With a unanimous resolution to reduce share capital.</p> Signup and view all the answers

    What is the legal presumption regarding partners' shares in gains and losses?

    <p>They are proportional to contributions unless otherwise stated.</p> Signup and view all the answers

    What does the term 'Leonine pact' refer to in the context of partnership agreements?

    <p>An agreement that excludes partners from profit or loss sharing.</p> Signup and view all the answers

    How are contributions to a partnership valued when not explicitly stated in the agreement?

    <p>They shall be presumed equal among all partners.</p> Signup and view all the answers

    Which article states that partners' participation in profits should follow the approval of accounts?

    <p>Art. 2262</p> Signup and view all the answers

    What happens if only the profit share is determined in the partnership agreement?

    <p>The share in losses is assumed to be equal.</p> Signup and view all the answers

    What does Art. 2306 specifically prohibit regarding partner contributions?

    <p>Fully refunding contributions without resolution.</p> Signup and view all the answers

    What should the partnership's creditors do if there is a proposed reduction of share capital?

    <p>Challenge the reduction resolution legally.</p> Signup and view all the answers

    How can each partner's portion of profits be determined if not specified in the partnership agreement?

    <p>According to contributions or by court determination.</p> Signup and view all the answers

    What is the principle established by Article 49 TFEU regarding the freedom of establishment?

    <p>It prohibits restrictions on the freedom of establishment for nationals of a Member State.</p> Signup and view all the answers

    Under which theory does the application of national law to a company generally follow when determining jurisdiction?

    <p>The incorporation theory</p> Signup and view all the answers

    Which aspect is NOT included in the freedom of establishment as mentioned in the document?

    <p>The right to engage in temporary economic activities.</p> Signup and view all the answers

    What does Article 54 TFEU state about companies or firms formed in accordance with Member State law?

    <p>They are treated the same as natural persons who are nationals of Member States.</p> Signup and view all the answers

    What type of EU legal instrument is binding in its entirety and directly applicable in all Member States?

    <p>A regulation</p> Signup and view all the answers

    The restrictions on freedom of establishment do NOT include which of the following according to Article 49 TFEU?

    <p>Operating a company in multiple jurisdictions.</p> Signup and view all the answers

    What is the main focus of the freedom to provide services under Article 56 TFEU?

    <p>Temporary service offerings from the home country.</p> Signup and view all the answers

    Which of the following best represents the 'real seat theory' in company law?

    <p>It associates the legal jurisdiction of a company with where its main office is physically located.</p> Signup and view all the answers

    What is a primary objective of Article 288 TFEU regarding Union competences?

    <p>To allow institutions to create binding regulations and directives.</p> Signup and view all the answers

    Which of the following is NOT a right included in the freedom of establishment?

    <p>The right to conduct occasional consulting services.</p> Signup and view all the answers

    Study Notes

    Italian and European Company Law

    • Companies are the typical organizational structures for businesses, providing a framework for associated forms of business activity.
    • Article 2082, Civil Code defines an entrepreneur as someone who professionally conducts an organized economic activity to produce or exchange goods or services.
    • Organization of a business requires planning, coordination, and the coordinated use of productive factors (capital and labor).
    • Economic viability is determined by the relationship between costs and revenues.
    • Distinctions of business activities by the Civil Code:
    • Object: commercial or agricultural
    • Size: small, medium-sized
    • Form: individual or collective (using a collective form)
    • Agricultural entrepreneur (Art. 2135 c.c.): involved in land cultivation, forestry, animal husbandry, and related activities
    • Commercial entrepreneur (Art. 2195 c.c.): engaged in industrial activity for the production of goods or services, intermediary activities (movement of goods), transport, and banking/insurance businesses
    • Small Entrepreneurs (Art. 2083 c.c.): includes cultivators of land, artisans, small traders, and professional activities primarily based on individual or family labor.
    • Organizational, administrative structure and accounting procedures are required for an entrepreneur (whether operating in a corporate or collective form), to detect any possible crisis and ensure continuity of the business (art. 2086 с.с.) .
    • Legal entities in Italian Company Law include partnerships and companies (limited liability companies).
    • Partnerships: simple partnerships, general partnerships, limited partnerships.
    • Companies: companies limited by shares (S.p.a. - Societa per Azioni), limited liability companies (S.r.l. - Societa a Responsabilita Limitata), companies limited by shares with limited liability (S.a.p.a - Societa in Accomandita per Azioni) and cooperative companies.
    • Distinctive signs of a business include business name, banner, trademark.

    Common Features Between Partnerships and Companies

    • Joint exercise of business activity (based on the concept of entrepreneur).
    • Contributions from members are in the form of goods and services, cash, and receivables.
    • Profit sharing.

    Key Features of Simple and General Partnerships

    • Incorporation is based on a partnership agreement.
    • The company operates according to the established forms and the registered content, with the publication effect.
    • General partners have unlimited liability for all debts
    • Limited partners have liability limited to the quota they conferred.
    • Partnership agreement content, including the parties' last names, residency, the company name, the headquarters, the purpose of the partnership, contributions, services to be provided by the partners or method of valuation, regulations determining how profits are distributed and calculation of shares, the term of the operation.
    • Amendments to the instrument of incorporation are only possible with consent of all partners. Exceptions might be present in the partnership contract.
    • Business register registration of general partnerships is a condition for regulatory compliance, but not for validity.
    • Irregular general partnerships need to register for it to be applicable fully governing rules.
    • Commercial enterprise has the duty to establish accounting structure to monitor its crisis and its business continuity
    • Partners liability for partnership obligations: (simple and general) primary responsibility for paying off the partnership's debts lies on the assets of the partnership itself
    • Liability of the partners who don't have the power of representation regarding the partnership may be excluded or limited by an appropriate agreement.
    • Partner's personal creditors cannot directly access partnership assets but can take actions regarding profits and liquidation of the quota
    • Administration of the partnership is aimed at managing partnership (Power to manage is the power to carry out all acts within the specific purpose of the partnership).
    • Managing partners: those with the power to manage
    • Non-managing partners: those with the right to information on the running of the partnership
    • General responsibilities and powers of managers: managing the business activity.
    • The power of representation is the power to act with third parties on behalf of the partnership, to acquire rights and to assume obligations.
    • Partners liability for the obligations (debts) of a partnership. -The difference between the so-called "regular general partnership" and "irregular general partnership". -The rules relating to simple partnerships will apply until the partnership registers in the business register.
    • The dissolution of a partnership can happen in many ways (death, withdrawal, exclusion etc.).
    • Grounds for dissolution of partnership
    • mandatory grounds
    • grounds that are subject to derogation (by agreement)
    • The payment of quota
    • The procedure for the liquidation of the partnership
    • Rights of shareholders for the dissolution of the partnership business
    • Shareholder's rights and their participation in the running of a company
    • Liability of partners for the company’s obligations
    • Obligations and rights in the management of the company
    • The rules that govern the company's operations are present in the articles of association.
    • The role that the governing body of a particular company has, in decision-making ability and influence
    • The liability of partners in regards to the company’s obligations before and after registration
    • Rules for amendments to the instrument of incorporation, for the increase or the decrease of the share capital, and for transformation, mergers and divisions
    • Common provision for limited liability companies
    • Grounds of dissolution
    • Liquidation of a company
    • Rules for the winding-up of a company
    • The company's creditors' rights
    • Groups of companies
    • purpose of regulation.
    • Cross-shareholdings.
    • Rules to make sure that there are strong legal safeguards regarding transactions between the parent company and the subsidiary company including preventing it from undermining the interest of all companies
    • The requirements for the division of a company
    • Legal actions for the dissolution of a company

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