Code of Corporate Crisis and Insolvency: impact on corporate organizational structure
On 16 March 2019 certain provisions of the Legislative Decree no. 14/2019, so called Code of Corporate Crisis and Insolvency (“CCII”) came into force which determined ground-breaking amendments to the Italian civil code and determined a material impact on the corporate governance of Italian companies. First of a series of legal focus, this document aims to provide a brief description of the changes occurred to the provisions of the Italian civil code on corporate organizational structures, deriving from the introduction on a new version of article 2086 of the Italian Civil Code.
Art. 375 of the CCII, having an impact on art. 2086 of the Italian Civil Code, introduces an obligation for companies, to implement an organizational, administrative and accounting set-up, that is appropriate to the nature and size of the company, to timely identify early symptoms of a crisis and take proper actions to overcome it and to recover business continuity.
The above provision aims to make the administrative body more accountable, imposing a duty to create and maintain within the company, independently from its size and dimension, a proper structure of roles and functions which may be able to detect early signals of an economic crisis before its outbreak and which may promptly react to preserve the business as a going concern.
Art. 377 of the CCII expressly extends the framework of art. 2086 of the Italian Civil Code, consisting in the obligation for the entrepreneur to implement an organizational, administrative and accounting set-up, to all types of companies. To this purpose, also the following articles have been amended:
– art. 2257 of the Italian Civil Code concerning the management of partnerships (società di persone);
– articles 2380-bis and 2409-nonies of the Italian Civil Code concerning the management of the companies limited by shares (società per azioni);
– art. 2475 of the Italian Civil Code concerning the management of limited liability companies (società a responsabilità limitata) which also extends to all limited liability companies the application of art. 2381 of the Italian Civil Code concerning the delegation of management powers provided for companies limited by shares.
With reference to limited liability companies, at first sight the new rules may appear in conflict with the possibility to entrust quotaholders with certain management powers of the company, since they seem to provide exclusive management powers only in favour of the directors. In this regard, it has been argued that the conflict is merely apparent, rather than effective, since the organizational duties bearing upon the administrative body play a different role from the management powers of the company which may continue to be entrusted to directors and quotaholders, pursuant to the applicable provisions of the articles of association (Consiglio Nazionale del Notariato, studio n. 58/2019/I, Il Nuovo Articolo 2475 c.c. Prima lettura).