CONVERSION OF THE “MILLEPROROGHE” DECREE – Extension of the 180-day approval period to 2020 budgets

1 – “Long” deadline for the approval of 2020 budgets

With the approval of the law converting the so-called “Decreto milleproroghe” (Decree-Law No. 183/2020), the emergency provisions originally set forth in Article 106 of the “Decreto Cura Italia” (Decree-Law No. 18/2020) have been extended.

As a result, by way of derogation from Articles 2364 (joint-stock companies) and 2478-bis (limited liability companies) of the Italian Civil Code and by way of derogation from any relevant statutory provisions, it is possible to benefit from the right to call the shareholders’ meeting for the approval of the financial statements as at 31.12.2020 within 180 days from the end of the financial year.

Therefore, for the so-called “solar” companies (i.e., with a financial year ending on 31 December 2020) it will be possible to call the shareholders’ meeting for the approval of the financial statements by 29 June 2021. As mentioned above, this option may also be exercised by companies that have not provided in their by-laws for the calling of the shareholders’ meeting to approve the financial statements within the longer term of 180 days.

2 – Procedures for conducting shareholders’ meetings: remote participation and written consultations

The extensions provided by the conversion of the decree in question also concern the rules and provisions of the bylaws relating to the technical procedures for holding shareholders’ meetings.

In fact, it has been established that all the provisions of Article 106 of Decree-Law No. 18/2020 apply to shareholders’ meetings held by 31 July 2021. Therefore, joint-stock companies, limited partnerships, limited liability companies, cooperatives and mutual insurance companies may provide, even by way of derogation from the articles of association, for electronic voting or voting by correspondence and participation in the shareholders’ meeting by videoconference. The shareholders’ meeting may also be held exclusively by such means, if suitable for ensuring the correct identification of all participants without the need for the chairman, secretary and notary (if any) to be physically in the same place.

Limited liability companies may allow voting by written consultation or consent in writing, also in derogation of the provisions of Article 2479, paragraph 4 and in derogation of any provisions of the Articles of Association.

3 – Considerations on the rules applicable to companies with financial years that do not coincide with the calendar year

The provisions of the law have given rise to considerable perplexity among the interpreters with respect to the rules applicable to companies with financial years that do not coincide with the calendar year (so-called “financial years at the turn of the year”). According to the reformulation of the first paragraph of Article 106 of the converted Decree-Law 18/2020, these companies would not be able to call the shareholders’ meeting for the approval of the financial statements within 180 days, regardless of the statutory indications and regulatory conditions. The literal wording of the new provision limits the scope of the extension to financial statements relating to financial years ending on 31 December 2020.

Considering, instead, the new paragraph 7 of Article 106, such companies could benefit not only from the facilitations related to the holding of the shareholders’ meeting, but also from the longer terms for the approval of the financial statements. In fact, it is established that “the provisions of this Article shall apply to shareholders’ meetings held by 31 July 2021”, thus not excluding the provisions of the first paragraph.

The debate among commentators is therefore open between the proponents of the first solution based on mere literal data (restrictive solution) and the second interpretation (extensive interpretation). On this point, it is hoped that the tax authorities or the tax legislator itself will intervene. We will send you information and updates on this point.

LDP stays at your disposal for any further clarification.