Italian Company law changes to adapt to Coronavirus outbreak

Art. 106 of the so-called ‘Cura Italia’ Law Decree dated March 17, 2020, introduced some important innovations for corporate law in order to support companies corporate activities during the Coronavirus outbreak.

1. Term for approval of the financial Statements

In particular, by way of derogation to Articles 2364, second paragraph, and 2478-bis, of the Italian Civil Code and to the provisions of the companies’ by-laws, the ordinary shareholders’ meeting for the approval of the financial statements shall be convened within 180 days after financial year end, instead of the ordinary 120 days term.

Hence, a longer period is granted by the law for the preparation of the financial statements and their approval.

2. Shareholders’ meetings

The second intervention concerns the possibility for ordinary or extraordinary shareholders’ meetings of companies, as well as for cooperative and mutual insurance companies, to allow votes to be expressed by electronic means or by correspondence and to attend the shareholders’ meetings by telecommunications, even in case  the by-laws do not allow it.

The aforementioned companies may also provide for the shareholders meeting to be held exclusively, by telecommunications, as long as the identification of the participants, their attendance and the exercise of their voting rights can be verified and guaranteed.

Also, the chairperson, the secretary and, if necessary, the notary, do not have to be present in the same place. According to ordinary provisions of law, the chairperson and the secretary of the meeting (for certain decisions, for instance modifications to the bylaws or capital increases, the notary shall act as secretary) shall be in the same place. Such provisions follow the practical guidelines issued by the Milan Notary Association with the emergency resolution no. 187 of March 11, 2020.

The new legislation does not clarify whether it is possible to apply the same provisions also for the meetings of the administrative bodies.

Moreover, limited liability companies may allow voting to take place by written consultation or by express written consent, also in the case provided for by Article 2479, paragraph 4, Italia civil code and when the by-laws only provide for the possibility to hold physical meetings.

3. Public Companies

Specific provisions apply to listed companies (as well as to companies admitted to trading on an MTF and companies with shares widely distributed among the public), which may appoint, either for ordinary or extraordinary shareholders’ meetings, the representative provided for in Article 135-undecies of Legislative Decree no. 58 of February 24, 1998, even when the by-laws provide otherwise, stating that attendance at the shareholders’ meetings shall take place exclusively through the designated representative.

People’s banks, cooperative banks, cooperative companies and mutual insurance companies, even as an exception to current regulations and the provisions of the by-laws which provide for limits on the number of proxies that can be given to the same individual, may appoint the representative provided for by Article 135-undecies of Legislative Decree no. 58 of February 24, 1998, for ordinary or extraordinary shareholders’ meetings. Such companies may also provide that attendance at the shareholders’ meeting shall take place exclusively through the aforementioned representative.

4. Companies under control of public entities

The above also apply also to companies controlled by public entities as provided for in Article 2, paragraph 1, letter m) of Legislative Decree no. 175 of August 19, 2016, within the limits of the resources available under the current legislation.

5. Duration of the provisions

The aforementioned provisions shall apply to shareholders’ meetings convened by July 31, 2020 or, if later, by the date until which in Italy the emergency related to the health risk associated with the outbreak of COVID-19 is in force.