Update: New Legal Framework for Corporate Liability (Copyright)
Since August 8th, a new offense has come into effect, which serves as the basis for the liability of legal entities in cases involving copyright infringements. In brief:
- Law No. 93/2023, published in the Official Gazette on July 24th, addresses “measures for the prevention and suppression of the illicit dissemination of copyright-protected content through electronic communication networks.” It has introduced a new legally relevant conduct within Article 171-ter of Law No. 633/1941, a provision already referred to in Article 25-novies of Legislative Decree No. 231/2001.
- Recently, “corporate liability under Article 231” has seen several additions, both through direct amendments to Legislative Decree No. 231/2001 and through changes to the referenced provisions, such as the one in question, which indirectly expands the scope of this liability.
- The aforementioned law concerns “Measures to combat cinematographic, audiovisual, or editorial piracy” and amends Article 171-ter of Law No. 633/1941, introducing a new subparagraph (h-bis) in paragraph 1.
- This new provision establishes the criminal liability of anyone who, for profit, unlawfully records on digital, audio, video, or audiovisual media, in whole or in part, a cinematographic, audiovisual, or editorial work, or who reproduces, performs, or communicates to the public the unlawfully recorded material.
- The adverb “unlawfully” is also linked to the methods indicated in paragraph 1 of Article 85-bis of the Consolidated Laws on Public Safety (Royal Decree 773/1931 or TULPS), which states that “it is prohibited to introduce, install, or otherwise unlawfully use devices or apparatus in places of public entertainment that allow the recording, reproduction, transmission, or fixation on audio, video, or audiovisual media, in whole or in part, of intellectual works created or broadcast there.”
- For such offenses, legal entities may also be subject to prohibitive sanctions as indicated in Article 9, paragraph 2, of Legislative Decree No. 231/2001 for a duration not exceeding one year, in case of conviction for any of the aforementioned crimes. These sanctions include: suspension from carrying out the activity, suspension or revocation of authorizations, licenses, or concessions related to the commission of the offense, prohibition from contracting with the Public Administration, except to obtain public services, exclusion from benefits, funding, grants, or subsidies, and the possible revocation of those already granted. This is without prejudice to additional sanctions already provided by copyright legislation.
CORPORATE
Advance Capital Increase Payments: Possible Refund
A recent decision by the Court of Cassation has revisited the issue of identifying advance capital increase payments, which are considered cash contributions made by shareholders to the company but not yet definitively incorporated into the company’s assets, having a specific earmarking. Consequently, if the capital increase is not effectively carried out, shareholders who made such payments have the right to a refund. This is because the justifying cause for their financial contribution to the company, akin to the concept of unjust enrichment, has ceased to exist.
Furthermore, to qualify a payment as an advance capital increase, the parties’ intention is crucial. There must be a clear and unequivocal intention to allocate these sums to a future capital increase. In determining the specific intention of the parties, the following factors may be decisive:
- Whether the payment is accompanied by an indication by the shareholder, such as specifying a deadline by which the increase should be resolved.
- The existence of any annotations in the accounting records or in the notes to the financial statements.
- The presence of specific statutory clauses governing such payments and full compliance with these clauses by shareholders making the payments.
- The presence of concrete circumstances indicating the shareholders’ intention to make advance capital increase payments.
For the reserve of advance capital increase payments, it has been referred to as a “personalized” or “tagged” reserve, exclusive to the shareholders who made the payments, corresponding to the amounts contributed by each shareholder. In the event that the increase is not carried out, shareholders have the right to a refund of their contributions. This is not considered a repayment of a loan but rather a result of the justifying cause for the financial contribution no longer existing.
Further Considerations on Videoconferencing Meetings: Does the Exceptional Regime Still Apply?
The deadline (once again extended by the latest legislative intervention) allowing regular videoconferencing meetings (and, by analogy, administrative body meetings) expired on July 31st. The relevant legislation, originally enacted during the emergency regime, has been extended from time to time, allowing for videoconferencing meetings even when the bylaws did not address this matter. According to Article 2370 of the Civil Code, a specific statutory provision is required for a valid videoconferencing meeting. Currently, with the previously mentioned deadline having passed, it appears that, in the absence of a statutory provision, videoconferencing may not be used for conducting company meetings. This raises the dilemma of whether to potentially amend the bylaws, if videoconferencing was not provided for, or await any further extension.
Substantial Amendment of the Corporate Purpose and the Fate of Agreements Entered Into
The modification of a company’s corporate purpose is an event that can occur during its existence, and its implications become relevant when the change is “substantial” (or de facto). This is particularly important concerning contracts entered into by the company up to that point and the possibility for dissenting, absent, or abstaining shareholders to withdraw from the company.
Moreover, it is crucial to consider how acts performed by administrators on behalf of the company are regarded. Regarding this issue, three general orientations can be delineated:
- The first orientation posits that the indication of the corporate purpose constitutes a limit to the representation authority of administrators (in summary, acts falling outside the corporate purpose would be ineffective).
- The second orientation believes that there is only a limit to the managerial authority of administrators, not to their representation authority, which remains general (in summary, acts are valid and enforceable against third parties).
- In jurisprudence, the prevailing view is the effectiveness of the act, except in cases where the third party has intentionally acted to the detriment of the company (the so-called “exceptio doli”). Therefore, it is generally believed that if an act performed by an administrator exceeds the limit of what is attributable to the corporate purpose, it would still bind the company, with only an internal liability issue for the administrator.
LDP remains at your disposal for any further information or in-depth analysis of the topics discussed above.
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