Italian and European Company Law PDF

Italian and European company law Companies are the typical organizational structures provided by the legal system for the exercise of business activity in associated form. Article 2082, Civil Code: «An entrepreneur is one who professionally carries on an organized economic activity for the purpose...

Italian and European company law Companies are the typical organizational structures provided by the legal system for the exercise of business activity in associated form. Article 2082, Civil Code: «An entrepreneur is one who professionally carries on an organized economic activity for the purpose of producing or exchanging goods or services.>>> -Organization: this means that there can be no enterprise activity without planning and coordination of the series of acts in which the enterprise develops and without the coordinated use of productive factors (capital and labor). A business activity can be said to be conducted economically when it is carried out in such a way that costs revenues. Distinctions provided by the Civil Code about the business activities: depending on the object of the business activity: commercial entrepreneur and agricultural entrepreneur; depending on the size of the business: small entrepreneur and medium-sized entrepreneur; depending on the person carrying out it the business activity: individual entrepreneur and enterprise carried on using a collective form Art. 2135 c.c. Agricultural entrepreneur: «An agricultural entrepreneur is one who engages in any of the following activities: cultivation of land, sylviculture, animal breeding and related activities.” Transformation, manipulation, conservation, commerce, exploitation of products obtained, in prevalence, from an essentially agricultural activity Supply of goods and services by using in prevalence instruments or resources usually employed in agricultural activity subjective connection objective connection Art. 2195 c.c. Commercial entrepreneur: «The following are required to be registered in the business register who engage in: 1) an industrial activity directed to the production of goods or services; 2) an intermediary activity in the movement of goods; 3) an activity of transportation by land, water or air; 4) a banking or insurance business; Art. 2083 c.c. Small entrepreneurs: «Small entrepreneurs are the direct cultivators of the fund, the artisans, small traders and those engaged in a professional activity organized mainly with his own labor and family members mbers' labor.>> Art. 2086 c.c. «The entrepreneur, whether operating in corporate or collective form, has the duty to establish an organizational, administrative and accounting structure appropriate to the nature and size of the enterprise, also in function of the timely detection of the enterprise's crisis and of the loss of business continuity, as well as to take action without delay for the adoption and implementation of one of the instruments provided for by the law for overcoming the crisis and recovery of the business continuity.>>> "Special commercial entrepreneur statute" A) Legal publicity and business register The ordinary section includes: partnerships and corporations cooperative corporations consortiums with external activity and consortium companies companies incorporated abroad with administrative or secondary offices on Italian territory European economic interest groups public entities whose exclusive or main purpose is a commercial activity individual (non-small) business entrepreneurs A special section includes agricultural enterprise (natural persons and legal persons) small entrepreneur and/or direct farmer simple company artisan entreprise (annotation). B) Accounting records Art. 2214 c.c.: «An entrepreneur engaged in a commercial activity must keep a journal and an inventory book. He must also keep other accounting records as required by the nature and size of the business C) Statuatory agency Factor: a person in charge of the management of a commercial enterprise Attorneys in fact: even though they are not in charge of the management, they have the power to perform all acts pertaining to the enterprise Clerks: employees who, due to the tasks they are entrusted with, are granted a limited power to represent the enterprise D) Insolvency Law The commercial entrepreneur who demonstrate the joint possession of certain requirement is not subject to bankruptcy Business: Art. 2555 c.c.: a business is a set of assets organized by an entrepreneur for the purpose of carrying out the entrepreneurial activity». Distinctive signs (art. 2563 et seq. c.c.): Business name (ditta): distinguishes the person of the entrepreneur in the exercise of the business activity. Banner (insegna): identifies the places where the business activities are carried out. Trademark (marchio): identifies and distinguishes the goods or services produced. Under Italian Company Law there are two main categories of legal entities which may be incorporated: partnerships and companies (also called limited liability companies). Categories of legal entity: Partnerships (società di persone): simple partnership (società semplice) general partnership (società in nome collettivos.n.c.) limited partnership (società in accomandita semplice - s.a.s) Companies (società di capitali): companies limited by share SPA (società per azioni - s.p.a.) limited liability companies SRL (società a responsabilità limitata - s.r.l.) partnership limited by shares SAPA (società in accomandita per azioni - s.a.p.a.) Italian Company Law provides another kind of company named cooperative company, which mainly can be distinguished from the other companies for their purpose: companies follow the profit purpose, cooperative companies follow the mutualistic purpose. Article 2247 (Partnership/company agreement) «Through a partnership/company agreement, two or more people contribute goods or services in order to carry out an economic activity for the purpose of sharing the relative profits». This rule applies to both partnerships and companies (with the exception of the first part for the s.p.a. and the s.r.l.) Common features between partnership and companies: 1. Joint exercise of a business activity (based on the concept of entrepreneur, art. 2082 c.c.). With regards to this characteristic the form of simple partnership can be used only for the joint exercise of non-business enterprise (i.e., agricultural enterprise). The other forms of legal entities can be used both for agricultural and commercial activities. 2. Contributions granted by members, contributions are the performance that members obligate themselves to make, in order to join the partnership/company and may be allocated in the form of goods and services (cash, goods, receivables...). 3.Profit sharing Broadly speaking, contributions must be economically estimable. This rule is fully applicable only to the partnership. For companies, instead, there are specific rules for the type of contribution members can make and for its evaluation. Contributions are the risk capital of the partnerships and companies, and they go to form the partnership/company's share capital. The share capital is a number that expresses the contributions in cash and remains the same throughout the course of the partnership/company. To modify this number a decision of the members of the company is necessary, because the evaluation of the contributions expressed in the share capital is contained in the instrument of incorporation. of sharing the relative profits». This rule applies to both partnerships and companies (with the exception of the first part for the s.p.a. and the s.r.l.) Common features between partnership and companies: The share capital has two important functions: A. it indicates the value that the partners have agreed to bind in the business activity, which cannot be divided among them, and is an asset guarantee for creditors; b. it has an organizing function because it is used to determine whether there are profits or losses and based on the amount of the contribution made by each person the extent of the rights to which they are entitled is determined. Share capital must be kept separate from the assets of the company, which consist of all the companies' activities and liabilities. Main difference between partnerships and corporations: only companies have the legal personality, partnerships don't. On the other hand, with partnerships their members have an unlimited and joint liability for partnership debts Unlimited liability means that partners are liable with all their personal assets for the debts of the whole partnership, limited liability on the contrary means that partners are liable only for their respective share. Joint and several liability of partners refers to the situation in which two or more parties are obligated to the same performance.