Unpleasant news! Serious risks for the Italian Limited Liability Companies

New legal provisions substantially transform the Italian limited liability Companies into unlimited liability companies.

Art. 378 of Codice della crisi di impresa which should have entered into force since 15 August 2020, and that the pandemic deferred to 1 September 2021, amended art. 2476 Italian Civil Code adding paragraph 6 and therefore the Directors will be liable with their own assets for the debts of the company if the assets of the Company are not sufficient.

Therefore, it seems the end of limited liability.

The high risks for the Directors of the Italian limited liability Companies, who are often also the only shareholders, will lead to no more new limited liability Companies and to extinguish the existing ones.

However, it is still possible according to EU legislation and other international laws, to set up Companies in Italy in the form provided by the legal systems of other EU countries or, alternatively, to allow companies established abroad to carry out their activities in Italy without the above mentioned problems and risks related to liability, which will enter into force in 2021.

Milano, October 2nd 2020.

Avv. Giovanni Babino