New code and new perspectives, reform of the business crisis and insolvency in Italy
On 10 January 2019, the Council of Ministers, on the proposal of the Minister of Justice Bonafede, definitively approved the new "Code of the business crisis and insolvency" (ccii), in implementation of the delegated Law no. 155 of 19 October 2017. The Consolidated Act contains 391 articles divided into four parts that will replace all the provisions in force on insolvency procedures, already reported in the "bankruptcy law" and in Law no. 3/2012 on over-indebtedness of all non-fallible persons.
The legislative decree was approved with the formula 'unless agreed' and pending publication of the full text of the Law in the Official Gazette, the appointment of auditors, statutory auditors or the Board of Statutory Auditors will take place following the adaptation of the Articles of Association to the new articles of the Civil Code.
The auditor or internal control body must be appointed within nine months of the entry into force of the law (which is 30 days after publication in the Official Gazette). In order to verify whether or not the conditions for implementing these procedures exist, it is necessary to assess the existence of the conditions with reference to the two financial years preceding the date of entry into force of the decree (presumably the year 2017 and 2018 if publication will take place by the month of February 2019).
Another important aspect concerns the responsibilities and obligations of entrepreneurs, administrative and control bodies. These parties will have to comply as soon as possible with the obligations laid down in the text, since many of the rules amending the provisions of the Civil Code that concern them will be operational already 30 days after publication in the Official Journal.
- Article No. 2086 of the Italian Civil Code requires entrepreneurs who operate in corporate or collective form to establish an organizational, administrative and accounting structure appropriate to the nature and size of the company.
- nr. 2476 c.c. (limited liability company) and Article 2486 of the Italian Civil Code (dissolution of the company), raises the level of responsibility of the corporate governance managers in the event of failure to comply with the obligations of preserving the integrity of the company's assets.
- 2476 of the Italian Civil Code, inserts a paragraph that provides that the directors of limited liability companies are liable to the company's creditors when the company's assets are insufficient to satisfy their claims.
- The new Article 2394 of the Italian Civil Code introduces the liability of directors of public limited liability companies towards the company's creditors.
- Article 2486 of the Italian Civil Code, inserted a paragraph that establishes the criteria for quantifying the damage that can be compensated once it has been ascertained that the directors have violated the provisions of the same article.
The approach of the legislator seems to be that of defining and punishing situations in which the directors of the companies have not acted in time to bring out the crisis and ask for help from the bodies responsible for the composition of the same, with a view to protecting business continuity.
For the purposes of the activity of an auditing firm, the code can be considered as a solution in favour of all those entrepreneurs who find themselves having to manage and resolve difficulties that any small or medium company could encounter.
The work of an auditing firm can, therefore, help the entrepreneur in an effective and efficient preventive identification of the risk, creating value for the company, further support to the proper functioning of the internal process.
For their part, even professionals, who work for the company, will benefit from additional support for optimal accounting and administrative management. This can be understood as a "cultural passage" that, once the impact and benefits have been overcome, will have visible medium and long-term effects on the small entrepreneurial fabric. Like any change, it takes time to be metabolised and understood.
For more information, contact:
Davide Borsani, Nexia Audirevi