Focus on: “Super-companies” de facto, foundations and consequences in the case of insolvency

Focus on: “Super-companies” de facto, foundations and consequences in the case of insolvency

A company is defined as a “de facto” company when it is formed on the basis of a verbal or conclusive behaviour, with evidence suggesting the will of the parties to establish a social relationship. Obviously there must be a common intention of the parties involved,  to work together to pursue a profit, by carrying out economic activities and with the availability of financial, material or immaterial resources that constitute a kind of mutual fund.

The company in fact can even be hidden, where there is a person acting as an entrepreneur and other subjects that do not appear formally, become members (so that they are not revealed outside the company’s existence). In this context, the Supreme Court, with three recent decisions issued in 2016 (judgment no. 1095 of 21 January 2016; judgment no. 10507 of 20 May 2016 and decision no. 12120 of 13 June 2016) addressed this issue. The so-called de facto super-company was formed by conclusive facts between corporations. The failure of that company, extended to shareholders (natural or legal persons) with unlimited liability.

Briefly, we refer to the case treated in judgment no. 12120 of 2016 which addresses issues and principles present in other rulings mentioned above, addressing the full facts which are of substantial importance, as well as legal significance.

The story is inspired by a judgment of the Court of Florence which – after declaring the bankruptcy of a limited liability company (Ltd.) – established the existence of a de facto unlawful Ltd company from a relationship between the company and a natural person, forming an unlimited liability company, was pronounced as a failure in extension. In the first instance the decision was appealed before the Court of Appeal of Florence, which had revoked the failure of an irregular companies on the assumption of Article. 147 L.F. It could not justify the extent of the failure, of a company with limited liability, to a third party liable to be a qualified external partner. The assessment in question was challenged before the Supreme Court by the Curator of the failure of Ltd, who has complained about the violation of Articles 147 L.F. and 2361 cc

The Judges of legitimacy, calling ruling n.1095 of 2016 of the same court, noted firstly, that to be considered eligible for participation, there needed to be conclusive evidence of a capital company’s connection to another company, called “de facto,” giving rise to a so-called “super-company”.

In this respect, however, the Court also emphasized that taking part in the work of the involved corporations can also occur through the simple act of the management body (Board of Directors). So in the absence of a shareholders’ resolution and the subsequent indication in the notes to the financial statements under Art. 2361 paragraph 2 of the commercial code, in fact, the evidence of such participation is essentially an act that can bind the directors and Company against third parties, even in the absence of a resolution by the shareholders (especially if you do not implement a substantial social change object). Thus it protects the status of third parties who come into contact with the Company by enabling them to rely on those representing the company (ie the directors). The limitations to their powers are not binding on third parties pursuant to Art. 2384 of the Commercial Code, even if those restrictions are made public, unless it is proved that such persons have acted knowingly to the detriment of society.


The above is consistent with the objectives pursued by the legislature in the reform of corporate law, with the intended purpose to encourage the raising of capital and credit risk, encouraging the protection of the market, social action stability and certainty of trade. Therefore, the risk of violations committed by the directors, through the possible performance of acts exceeding the powers conferred on them is transferred to the company, guaranteeing third parties protection in that their actions represent the management body. Obviously they remain without prejudice to the liability of the aforementioned directors against the company, shareholders and third parties, if they have acted in violation of the duties imposed by law, through the remedies made by the action of social responsibility, dismissal, the complaint to the Tribunal.

It is possible, the eligibility of an insolvent company (hidden or otherwise irregular) consisting of joint-stock companies may obtain the failure in extension of that de facto company, due to its business activities, pursuant to art. 147 L.F.

As above, according to the Court, considering Article 147 paragraph 5 L.F. cannot apply in any event to cases where the subject, is an individual entrepreneur. On the contrary, there would be a breach of the principle of equality enshrined by ‘art. 3 Const., there being no reasons that would justify a different regulatory treatment in the event that the shareholder already declared bankrupt (as established above) and collective or individual entrepreneur.

The ruling is comprehensive, ensuring a consistent and uniform protection to third parties. Of course it is hoped that the application remains the same in the opposite direction, with intuitable negative consequences to economic and legal relations.



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