Italy Update: Joint-stock company: Reduction of share capital below the legal limit

With order no. 2984 of 2022, the Court of Cassation again rejected the thesis that losses of more than one-third of the share capital of S.p.A. or S.r.l., and which reduce it below the legal minimum, would not cause the immediate dissolution of the company as there would be a situation of suspensive dissolution conditional on the failure to adopt the measures to repay losses or transform into partnerships.

In such cases, in fact, the directors must, “without delay” (respectively pursuant to Article 2447 for S.p.A. and pursuant to Article 2482-ter for S.r.l.) arrange to convene the shareholders’ meeting to resolve on the cancellation and reconstitution of the capital or the transformation of the company, in order to prevent its dissolution. Finally, the Supreme Court specifies that, although the law requires in these cases, the timely adoption of the measures mentioned above, there is no real deadline. Therefore, their adoption may also take place in the financial year following that in which the situation of dissolution occurred, it is understood that the course of a long period of time may undoubtedly affect the assessment of the work of the directors in terms of liability towards the company, the shareholders and the social creditors.

By Quorum, Italy, a Transatlantic Law International Affiliated Firm. 

For further information or for any assistance please contact, italy@transatlanticlaw.com

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