Incorporation Spa PDF

key words things to study In SPAs liability for corporate obligation is limited to the company asset the company’s capital is represented by shares Main features are : -Legal personality and perfect autono...

key words things to study In SPAs liability for corporate obligation is limited to the company asset the company’s capital is represented by shares Main features are : -Legal personality and perfect autonomy with regard to asset -limited liability of shareholders -Well define corporate organisation The capital is represented by shares Type of company Limited by shares : -Close companies limited by shares -Companies that resort to the risk capital (companies with shares that are widely held among the public, companies with shares that are listed on regular market also called open companies) 1.Incorporation The SPA only aquired legal personality once it has been registered,only from this moment the company is considered an independent legal entity whose right an obligation and the directors are different from its shareholders. The drawing up of the instrument of incorporation can be done in two ways: -simultaneous incorporation in which shareholders who both signed the instrument of incorporation, subscribe to the capital and provide their relative contribution -Drawing up the instrument of incorporation -Registration of the instrument of incorporation in the business register Incorporation through public subscription, the instrument of incorporation is stipulated at the end of a complex process which allows the capital to be raised from the public Incorporation through public subscription: steps 1. setting up a program (prospectus) 2. subscriptions 3. meeting of subscribers 4. stipulation of the incorporation instrument 5. registration of the instrument of incorporation in the Business register The instrument of incorporation can be an agreement or an unilateral act and has the form of a public deed The content of the instrument of incorporation a) the type and name of the company; (b) the objects of the company; (c) where the company has no authorised capital, the amount of the subscribed capital; (d) where the company has an authorised capital, the amount thereof and also the amount of the capital subscribed at the time the company is incorporated or is authorised to commence business Shareholder must subscribe the share capital in full -Provision relating to contribution must be complied, at least 25% of the cash contribution must be paid into the bank -authorisation and other condition imposed by the law must be respected Minimum capital : -The laws of the Member States shall require that, in order for a company to be incorporated or obtain authorisation to commence business, a minimum capital shall be subscribed the amount of which shall be not less than Eur 25.000. If a company being formed has acquired legal personality, the person who acted without limit, shall be jointly and several liable for transaction carried out before the registration : -There is unlimited liability of those who acted so the company and its asset are not reliable for action taken under its name before its registration -Any transaction that is not necessary for incorporation purposes shall therefore remain valid but with not effect Causes of nullity of contract contract is void when it is contrary to mandatory rules. The nullity of the contract is provided for the lack of one of the requirements [the agreement of the parties; the cause; the object; the form]. The nullity of the contract is provided if the cause is unlawful, or if the motives of the case are unlawful. The contract is also void in the other cases established by the law. After the registration we have legal entity, which is separate from its shareholders, and the company itself has economic and contractual relationships with third parties Directive (EU) 2017/1132 Article 11 Conditions for nullity of a company a) nullity must be ordered by decision of a court of law; b) nullity may be ordered only on the grounds if: 1. no instrument of constitution was executed 2. the objects of the company are unlawful 3. the instrument of constitution or the statutes do not state the name of the company, the amount of the individual subscriptions of capital, the total amount of the capital subscribed or the objects of the company; 4. There is failure to comply with provisions of national law concerning the minimum amount of capital to be paid up; 5. there is incapacity of all the founder members Once the company has been registered with the companies register, it can only be declared invalid in three cases: 1.failure to draw up the instrument of incorporation as a public deed; 2. illegality of the company's object: 3. failure to provide indication in the instrument of incorporation Directive (EU) 2017/1132 Article 12 Consequences of nullity -Nullity shall entail(can bring to) the winding-up(liquidation) of the company, as may dissolution. -The laws of each Member State may make provision for the consequences of nullity as between members of the company. -Holders of shares in the capital of a company shall remain obliged to pay up the capital agreed to be subscribed by them but which has not been paid up Consequences of nullity under Italian Company Law: Article 2332 → the happening of a cause of nullity of the company is treated as a cause of dissolution of the company →the nullity of a company don't undermine the effectiveness of any actions taken on behalf of the company after its registration → the cause of nullity can be eliminated It is possible to incorporate a single-member company limited by shares (unilateral act, 2328 c.c.), but some specific rules will apply with regard to: A) liability of the sole shareholder before the company is registered b) contract between the company and the sole shareholder to ensure greater transparency since there could be a risk of conflicts c) regulations regarding contributions d) specific forms of disclosure Contribution contributions refer to the part of shareholder's equity that is permanently dedicated to business productivity, the contributions come to form the initial assets of the company. The aim of the regulation of contributions is to ensure the correct formation of share capital Main purpose of the regulations: -ensure the company actually acquires the contributions -ensure that the shareholders ascribe the correct value of their contributions, to avoid their overall value being less than the total amount of the share capital (2346, par. 5, c.c.) In a Company limited by shares can be contributed only cash or assets in kind or credits. It is not possible to contribute the provision of a service or work. Company Law provides different rules depending on whether the contribution is made in cash or in assets in kind or credits. Cash contributions imply: →Obligation to pay 25% of the cash contribution at the time of incorporation of the company → Payment of the residual contributions → Transfer of shares not fully paid up → Rules for contributions not paid Contributions of assets in kind or credits Directive (EU) 2017/1132 Article 48 1. A report on any consideration other than in cash shall be drawn up before the company is incorporated or is authorized to commence business, by one or more independent experts 2. The experts' report referred to in paragraph 1 shall contain at least a description of each of the assets comprising the consideration as well as of the methods of valuation used Contributions of assets in kind or credits Italian Company Law → Valuation report by an expert → Check by the directors → Possible non-concordance of value/remedies → Contributions without valuation-cases Potentially Risky Acquisitions Italian Company Law Art. 2343-bis c.c this discipline aims to prevent the company from acquiring assets not by way of contribution and thus without following the rules provided for them → field of application, time limit → excluded operations → liability Shares to which the obligation of ancillary performance is connected 2.shares Shares are the quota held by shareholders in companies limited by shares (and also in s.a.p.a.). Their sum represents the share capital of the company, and the share capital is divided into shares of equal value, so each share represents the same portion of the nominal share capital. Each shareholder is granted a number of shares proportional to the portion of the share capital subscribed and is also related to the amount that they contributed Main features of share : -have the same value -grant the same right -are independent and indivisible -circulate freely on a so-called certificate-holder basis The nominal value of shares means the part of the share capital represented by each share and expressed as a monetary amount, in euros. Shares could also be issued without nominal value. All shares have equal value and grants the owner a set of administrative rights, rights which regard to the assets and mixed rights. Equality can be → Relative equality( could create different categories of shares that grant different rights) →Objective equality ( rights may depend on number of shares held) From a subjective point of view, shareholder rights may be distincted into four categories: 1. Rights independent of the number of shares held 2.Rights that compete only if one owns a given percentage of the share capital 3.Rights that compete only if one holds a share for a given period 4.Rights that compete to each shareholder in proportion to the number of shares held → Ordinary shares are those provided with the typical rights provided by law. → Special shares can be created by statute or a subsequent amendment to it Companies limited by shares Italian and European Company Law – A.A. 2024/2025 Dott.ssa Giulia Serafin Main features of companies limited by shares: → for corporate obligations only the company is liable with its assets (art. 2315, par. 1, c.c.) → corporate participation is represented by shares (art. 2346, par. 1, c.c.) Main features of the companies limited by shares: → Legal personality → Limited liability of shareholders → Corporate organization → Shares Evolution of the regulation: Civil code (1942) Italian Law n. 216/1974 Testo unico dell’intermediazione finanziaria (d.lgs. n. 58/1998) 2003 Company Reform for not listed companies Italian Law n. 21/2024 (so-called «legge capitali») Sub-types of companies limited by shares Article 2325-bis, c.c. → close companies limited by shares → companies that resort to the risk capital market Companies that resort to the risk capital market (so called open companies, art. 2325- bis c.c.) →companies with shares that are widely held among the public → companies with shares that are listed on regulated markets (listed companies) Art. 2325-ter, c.c. (Companies issuing widely distributed financial instruments) For the purposes of Article 2325-bis, issuers of shares widely distributed among the public are Italian issuers not listed on regulated Italian markets that have shareholders, other than shareholders owning more than 3 per cent of the share capital, in excess of five hundred, which together hold a percentage of share capital of at least 5 per cent and exceed two of the three limits set forth in Article 2435-bis, first paragraph. Those issuers whose shares are subject to legal restrictions on circulation also concerning the exercise of rights having an equity content, or whose corporate object includes exclusively the performance of non-profit activities of social utility or aimed at the enjoyment by the shareholders of a good or a service, are not considered to be widespread issuers. …we have rules that will apply: → to all the companies limited by shares → only to the so-called close companies limited by shares → only to the so-called open companies limited by shares → only to the listed companies Incorporation The drawing up of the instrument of incorporation can follow two different ways: 1. simultaneous incorporation 2. incorporation through public subscription Incorporation through public subscription: steps (Art. 2333-2336 c.c.) This procedure is 1. setting up a program (prospectus) rarely used 2. subscriptions 3. meeting of subscribers 4. stipulation of the incorporation instrument 5. registration of the instrument of incorporation in the Business register → obligations and liability of promoters (art. 2337-2341 c.c.) Simultaneous incorporation procedure 1. drawing up the instrument of incorporation 2. registration of the instrument of incorporation in the Business register →abrogation of the approval by the judicial authority (2000) The instrument of incorporation → agreement or unilateral act 2328 par. 1 (partial disapplication of Art. 2247 c.c.) → form of the act: public deed (under penalty of invalidity)  Directive (EU) 2017/1132 Article 10 Drawing up and certification of the instrument of constitution and the company statutes in due legal form In all Member States whose laws do not provide for preventive administrative or judicial control, at the time of formation of a company, the instrument of constitution, the company statutes and any amendments to those documents shall be drawn up and certified in due legal form. The content of the instrument of incorporation Directive (EU) 2017/1132 Article 3 Compulsory information to be provided in the statutes or instruments of incorporation The statutes or the instrument of incorporation of a company shall always give at least the following information: (a) the type and name of the company; (b) the objects of the company; (c) where the company has no authorised capital, the amount of the subscribed capital; (d) where the company has an authorised capital, the amount thereof and also the amount of the capital subscribed at the time the company is incorporated or is authorised to commence business, and at the time of any change in the authorised capital, without prejudice to Article 14(e); (e) in so far as they are not legally determined, the rules governing the number of, and the procedure for, appointing members of the bodies responsible for representing the company vis-à-vis third parties, administration, management, supervision or control of the company and the allocation of powers among those bodies; (f) the duration of the company, except where this is indefinite. Article 4 Compulsory information to be provided in the statutes or instruments of incorporation or separate documents The following information at least shall appear in either the statutes or the instrument of incorporation or a separate document published in accordance with the procedure laid down in the laws of each Member State in accordance with Article 16: (a) the registered office; (b) the nominal value of the shares subscribed and, at least once a year, the number thereof; (c) the number of shares subscribed without stating the nominal value, where such shares may be issued under national law; (d) the special conditions, if any, limiting the transfer of shares; (e) where there are several classes of shares, the information referred to in points (b), (c) and (d) for each class and the rights attaching to the shares of each class; (f) whether the shares are registered or bearer, where national law provides for both types, and any provisions relating to the conversion of such shares unless the procedure is laid down by law; (g) the amount of the subscribed capital paid up at the time the company is incorporated or is authorised to commence business; (h) the nominal value of the shares or, where there is no nominal value, the number of shares issued for a consideration other than in cash, together with the nature of the consideration and the name of the person providing the consideration; (i) the identity of the natural or legal persons or companies or firms by which or in whose name the statutes or the instrument of incorporation, or where the company was not formed at the same time, the drafts of those documents, have been signed; (j) the total amount, or at least an estimate, of all the costs payable by the company or chargeable to it by reason of its formation and, where appropriate, before the company is authorised to commence business; (k) any special advantage granted, at the time the company is formed or up to the time it receives authorisation to commence business, to anyone who has taken part in the formation of the company or in transactions leading to the grant of such authorisation. Art. 2328, par. 2, c.c. The instrument of incorporation must be drawn up by public deed and must state: 1) the surname and first name or company name, date and place of birth or the state of incorporation, the domicile or the registered office, the citizenship of the shareholders and promoters, if any, as well as the number of shares assigned to each of them; 2) the company name and the municipality where the registered office of the company and any branch offices; 3) the activity that constitutes the company's object; 4) the amount of subscribed and paid-up capital; 5) the number and par value, if any, of the shares, their characteristics and the manner of issue and circulation; 6) the value attributed to receivables and assets contributed in kind;  7) the rules according to which profits are to be distributed; 8) the benefits, if any, granted to the promoters or members founders; 9) the system of administration adopted, the number of directors and their powers, indicating which among them have the representation of the company; 10) the number of members of the board of auditors; 11) the appointment of the first directors and auditors or the members of the supervisory board and, when provided for, of the person in charge of carrying out the external audit; 12) the total amount, at least approximately, of the expenses for the establishment charged to the company; 13) the duration of the company or, if the company is incorporated for an indefinite period, the period of time, however, not exceeding one year, after which the partner may withdraw. Art. 2328, par 3, c.c. → Instrument of incorporation → Articles of association (or statute or by- laws) Conditions for incorporation → minimum capital amount (art 2327 c.c.) → art. 2329 c.c.  Directive (EU) 2017/1132 Article 45 Minimum capital 1. The laws of the Member States shall require that, in order for a company to be incorporated or obtain authorisation to commence business, a minimum capital shall be subscribed the amount of which shall be not less than Eur 25.000. 2. Every five years the European Parliament and the Council, acting on a proposal from the Commission in accordance with Article 50(1) and Article 50(2)(g) of the Treaty, shall examine and, if need be, revise the amount expressed in paragraph 1 in euro in the light of economic and monetary trends in the Union and of the tendency to allow only large and medium-sized undertakings to opt for the types of company listed in Annex I. →Effects of the stipulation of the instrument of incorporation for the parties (2331, par. 4, c.c.). →The obligation to file the instrument of incorporation (art. 2330, par. 1 and 2, c.c.). →Legal check by notary (formal and substantive legality check). →Check by Business registry Office (2330, par. 3, c.c., formal regularity of the filed documentation). →Registration (constitutive effect: 2331, par. 3, c.c.).  Directive (EU) 2017/1132 Article 14 Documents and particulars to be disclosed by companies Member States shall take the measures required to ensure compulsory disclosure by companies of at least the following documents and particulars: (a) the instrument of constitution, and the statutes if they are contained in a separate instrument; (b) any amendments to the instruments referred to in point (a), including any extension of the duration of the company; (c) after every amendment of the instrument of constitution or of the statutes, the complete text of the instrument or statutes as amended to date; (d) the appointment, termination of office and particulars of the persons who either as a body constituted pursuant to law or as members of any such body: (i) are authorised to represent the company in dealings with third parties and in legal proceedings; it shall be apparent from the disclosure whether the persons authorised to represent the company may do so alone or are required to act jointly; (ii) take part in the administration, supervision or control of the company; (e) at least once a year, the amount of the capital subscribed, where the instrument of constitution or the statutes mention an authorised capital, unless any increase in the capital subscribed necessitates an amendment of the statutes; (f) the accounting documents for each financial year which are required to be published in accordance with Council Directives 86/635/EEC and 91/674/EEC and Directive 2013/34/EU of the European Parliament and of the Council; (g) any change of the registered office of the company; (h) the winding-up of the company; (i) any declaration of nullity of the company by the courts; (j) the appointment of liquidators, particulars concerning them, and their respective powers, unless such powers are expressly and exclusively derived from law or from the statutes of the company; (k) any termination of a liquidation and, in Member States where striking off the register entails legal consequences, the fact of any such striking off. Registration under ECL: the BRIS https://e- justice.europa.eu/489/EN/business_registers_ _search_for_a_company_in_the_eu?init=true Effects (‘opposability vis-à-vis third parties’) of the publication of the information required by Art. 14 Directive (EU) 2017/1132 Article 14, par. 5 5. The documents and information referred to in Article 14 may be relied on by the company as against third parties only after they have been disclosed in accordance with paragraph 3 of this Article [it depends by the Member State Law: in Italy is applied the Publicity in the Business register], unless the company proves that the third parties had knowledge thereof. However, with regard to transactions taking place before the sixteenth day following the disclosure, the documents and information shall not be relied on as against third parties who prove that it was impossible for them to have had knowledge thereof. Third parties may always rely on any documents and information in respect of which the disclosure formalities have not yet been completed, save where non-disclosure causes such documents or information to have no effect. Before registration we do not have a legal entity... Who is liable for obligations related to operations carried out before the registration in the name of the company?  Directive (EU) 2017/1132 Article 7 General provisions and joint and several liability 1. The coordination measures prescribed by this Section shall apply to the laws, regulations and administrative provisions of the Member States relating to the types of company listed in Annex II. [s.p.a., s.r.l., s.a.p.a] 2. If, before a company being formed has acquired legal personality, action has been carried out in its name and the company does not assume the obligations arising from such action, the persons who acted shall, without limit, be jointly and severally liable therefor, unless otherwise agreed. Under Italian Company Law… art. 2331, parr. 2-5, c.c. → transactions carried out before the registration → liability of those who acted → liability of the company (necessary and unnecessary operations) → if the company is not registered… Nullity Nullity of Companies limited by shares Purposes of the discipline - certainty of legal transactions - stability of corporate organization → before the Company is registered we don’t have a legal entity, we have only a contract → it will applies the provisions of Contract Law… [the contract will be void or voidable for the causes provided for in contract law: art. 1418 c.c. Article 1418 c.c. (Causes of nullity of contract). A contract is void when it is contrary to mandatory rules, unless the law provides otherwise. The nullity of the contract is provided for the lack of one of the requirements indicated by Art. 1325 [the agreement of the parties; the cause; the object; the form, when it appears that it is prescribed by law under penalty of nullity], the illegality of the cause, the illegality of the motives in the case indicated by Article 1345 and the lack in the object of the requirements set forth in Article 1346. The contract is also void in the other cases established by the law. → But after the registration we have a legal person, a company wich has economic and contractual relationships with third parties… → if we continued to apply the causes of nullity provided by contract law, it would create a very unstable situation, and this would go against the principle of certainty of legal transactions (just think that the nullity of a contract can be declared without time limit and that this declaration of nullity generates an obligation for the parties to return the performances done) Once the Company is registered, it can only be declarated void in a limited number of cases, which must be strictly interpreted.  Directive (EU) 2017/1132 Article 11 Conditions for nullity of a company The laws of the Member States may not provide for the nullity of companies otherwise than in accordance with the following provisions: (a) nullity must be ordered by decision of a court of law; (b) nullity may be ordered only on the grounds: (i) that no instrument of constitution was executed or that the rules of preventive control or the requisite legal formalities were not complied with; (ii) that the objects of the company are unlawful or contrary to public policy; (iii) that the instrument of constitution or the statutes do not state the name of the company, the amount of the individual subscriptions of capital, the total amount of the capital subscribed or the objects of the company; (iv) of failure to comply with provisions of national law concerning the minimum amount of capital to be paid up; (v) of the incapacity of all the founder members; (vi) that, contrary to the national law governing the company, the number of founder members is less than two. Apart from the grounds of nullity referred to in the first paragraph, a company shall not be subject to any cause of non- existence, absolute nullity, relative nullity or declaration of nullity. Article 2332, par. 1, c.c. failure to draw up the instrument of incorporation as a public deed; illegality of the company’s object; failure to provide indication in the instrument of incorporation (or in the statute) of the company name or the contributions or the share capital amount or the company’s object.  Directive (EU) 2017/1132 Article 12 Consequences of nullity 1. The question whether a decision of nullity pronounced by a court of law may be relied on as against third parties shall be governed by Article 16. Where the national law entitles a third party to challenge the decision, he may do so only within six months of public notice of the decision of the court being given. 2. Nullity shall entail the winding-up of the company, as may dissolution. 3. Nullity shall not of itself affect the validity of any commitments entered into by or with the company, without prejudice to the consequences of the company's being wound up. 4. The laws of each Member State may make provision for the consequences of nullity as between members of the company. 5. Holders of shares in the capital of a company shall remain obliged to pay up the capital agreed to be subscribed by them but which has not been paid up, to the extent that commitments entered into with creditors so require. Consequences of nullity under Italian Company Law: Article 2332, par. 2, 3, 4, 5, c.c. → the happening of a cause of nullity of the company is treated as a cause of dissolution of the company → the nullity of a company does not undermine the effectiveness of any actions taken on behalf of the company after its registration → the cause of nullity can be eliminated → publicity Single member companies Single-member companies → single-member s.r.l.: Directive 2009/102/EC of the European Parliament and of the Council of 16 September 2009 in the area of company law on single-member private limited liability companies (XII directive) → single-members s.p.a.: see art. 11, Directive (EU) 2017/1132 Italian Company Law (2003 Company Law Reform) It is possible to incorporate a single-member company limited by shares (unilateral act, 2328 c.c.), but some specific rules will apply with regard to: a) liability of the sole shareholder before the company is registered (2331, par. 2, c.c.) b) contract between the company and the sole shareholder (2362, par. 5, c.c.) c) contributions (2342, par. 2 and 4, c.c.) d) disclosure (2250, par. 4 and 2362, par. 1-4, c.c.) → consequences of breaching the rules c) and d) (2325, par. 2, c.c.) → application of the discipline even when the shares belong to a single person at a time after the incorporation Contributions Share capital → minimum capital required → purpose? Main purpose of the discipline: → effectiveness of the contributions → true value of contributions (2346, par. 5, c.c.)  Directive (EU) 2017/1132 Article 46 Assets Subscribed capital may be formed only of assets capable of economic assessment. However, an undertaking to perform work or supply services may not form part of those assets. In a Company limited by shares can be contributed only cash or assets in kind or credits. It is not possible to contribute the provision of a service or work (2342, par. 5, c.c.). Unless otherwise is provide in the instrument of incorporation, contributions must made in cash(2342, par. 1 , c.c.). Company Law provides different rules depending on whether the contribution is made in cash or in assets in kind or credits. Cash contributions: → Obligation to pay 25% of the cash contribution at the time of incorporation of the company (2342, par. 2, c.c.) → Payment of the residual contributions → Transfer of shares not fully paid up (2356 c.c.) → Rules for contributions not paid (2344 c.c.) Contributions of assets in kind or credits Directive (EU) 2017/1132 Article 48 Experts’ report on consideration other than in cash 1. A report on any consideration other than in cash shall be drawn up before the company is incorporated or is authorised to commence business, by one or more independent experts appointed or approved by an administrative or judicial authority. Such experts may be natural persons as well as legal persons and companies or firms under the laws of each Member State. 2. The experts' report referred to in paragraph 1 shall contain at least a description of each of the assets comprising the consideration as well as of the methods of valuation used and shall state whether the values arrived at by the application of those methods correspond at least to the number and nominal value or, where there is no nominal value, to the accountable par and, where appropriate, to the premium on the shares to be issued for them. Contributions of assets in kind or credits Italian Company Law → Valuation report by an expert appointed by the court → Check by the directors (non-transferability of the shares) → Possible non-concordance of value: remedies → Contributions without valuation – cases (art. 2343-ter, 2343-quater, c.c. – art. 50 and 51 Directive (EU) 2017/1132) Potentially Risky Acquisitions Directive (EU) 2017/1132 Article 52 Substantial acquisitions after incorporation or authorisation to commence business 1. If, before the expiry of a time limit laid down by national law of at least two years from the time the company is incorporated or is authorised to commence business, the company acquires any asset belonging to a person or company or firm referred to in point (i) of Article 4 for a consideration of not less than one-tenth of the subscribed capital, the acquisition shall be examined and details of it published in the manner provided for in Article 49(1), (2) and (3), and it shall be submitted for the approval of a general meeting. […] Member States may also require these provisions to be applied when the assets belong to a shareholder or to any other person. 2. Paragraph 1 shall not apply to acquisitions effected in the normal course of the company's business, to acquisitions effected at the instance or under the supervision of an administrative or judicial authority, or to stock exchange acquisitions. Potentially Risky Acquisitions Italian Company Law Art. 2343-bis c.c. → this discipline aims to prevent the company from acquiring assets not by way of contribution and thus without following the rules provided for them → field of application, time limit → excluded operations → liability Shares to which the obligation of ancillary performance is connected (art. 2345 c.c.)…