Italy Update: Violation of the principle of clarity of the financial statements: the approval resolution is null and void

Court of Cassation, order no. 7433/2023

A S.p.A. was rejected, in the second instance of judgment, the appeal of the sentence declaring the nullity of its shareholders’ resolution approving the financial statements for the year, due to the violation of the principles of clarity and truthfulness of the financial statements.

At the end of its examination, the Supreme Court recalled the principle of law by virtue of which any choice of preparation of financial statements, even where it has a more intense content of discretion, must in any case respond to the limit given by compliance with the general clause of clarity of accounting information. Indeed, in the context of the precepts referred to in Articles. 2423 ss. c.c., the principle of clarity plays an autonomous role, given that, according to paragraph 2 of the aforementioned provision, the financial statements “must be prepared clearly and must represent truthfully and correctly the financial position of the company”.

In light of the above, the Supreme Court, conforming to the consolidated jurisprudential address on the subject (ex multis: Cass. 6 October 2020, n. 21494) reaffirmed the principle of law by virtue of which the financial statements of a capital company, which violate the precepts of clarity and precision dictated by art. 2423, paragraph 2, of the Italian Civil Code, it is unlawful, so that the shareholders’ resolution with which it was approved is null and void, even in all cases in which it is not possible to deduce from the financial statements themselves and from the related annexes, including the report, the full range of information that the law wants to be provided for each of the individual items registered.

The Supreme Court therefore declared the company’s appeal inadmissible.

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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