Types of Companies
Corporate Law
● Legislative Decree 58/1998 (called TUF) which contains disclosure and compliance obligations for SpAs;
● the National Commission for Companies and the Stock Exchange (CONSOB);
● the code issued by the Italian Stock Exchange;
● the company’s Articles of Incorporation.
The above legal framework only applies to companies listed in Italy. As part of the EU then, Italy is also subject to laws already established in the European Union and those that come down from the European Commission.
Corporate Governance
- Traditional structure: a managing body, i.e. a Sole Director or a Board of Directors and a Board of Statutory Auditors; or,
- Dualistic structure: a managing board elected and supervised by a supervisory board; or,
- Monistic structure: consists of only the Board of Directors provided that an internal committee is established for control of the management.
In the traditional structure, if the company is overseen by a Board of Directors who serve in terms of three financial years, then a chairman of the board is to be appointed by the shareholders.
For an SpA, it is necessary to have a Board of Statutory Auditors. This is the body entrusted with legal compliance and control over a company and is essentially a supervisory board. Their primary duty is to establish procedures that ensure compliance with both the law and the by-laws. It consists either of three or five members (with two additional deputy members in case one permanent member leaves) whose minimum requirements are that: at least one standing and one deputy member must qualify as a certified public accountant while the others may be accountants, lawyers, business and/or labor consultants.
For an Srl however, management of the company is commonly through a Sole Director although it is still possible to have a board of directors instead. There is also a choice between having a Board of Statutory Auditors, a sole statutory auditor, or an outside certified public accountant or auditing firm.
Shareholders meetings are usually called by the managing body. Meetings should be convened at least once a year in order to approve the yearly balance sheet. Both SpA and Srl companies must prepare consolidated financial statements for auditing.
Corporate Social Responsibility
Check also our business and fiscal tips in the video below.
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