Please enable JavaScript.

Coggle requires JavaScript to display documents.

Lesson 35: SOLE SHAREHOLDER. GROUPS OF COMPANIES. PUBLICLY HELD COMPANY,…

- - - - The cases relevant to the reconstruction of the legal system of groups of companies are, in order of intensity of the link:
        
        a) the link;
        
        b) control;
        
        c) management and coordination (otherwise called unitary management).
  - - - internal control by law
        a company has the majority of the votes exercisable at the ordinary shareholders' meeting of another company
        
        the notion outlined in art. 2359 must be clarified in the sense of recognising the status of parent company to the company that has the necessary majority in resolutions concerning the appointment, revocation or liability of directors
      - de facto or by participation
        when one company has sufficient votes to exercise a dominant influence at the ordinary shareholders' meeting
        
        participation in a syndicate agreement
      - external de facto or contractual control
        a company is under the dominant influence of another company by virtue of particular contractual ties with
        
        Contracts and domain clauses
      - chain of control
  - - - Two phenomena occurs that must be regulated:
        - asset watering down
        - administrative intertwining
        
        in order to regulate (as treasury shares):
        
        a) the subsidiary may acquire shares or shareholdings in the parent company only:
        1 limits of the distributable profits and available reserves
        2 if the shares are fully paid up
        3 with the authorisation of the shareholders' meeting
        4 in open companies if the shareholding held is not more than one fifth of the share capital of the parent company
        
        b) the subsidiary cannot exercise the right to vote in the shareholders' meeting of the parent
        
        c) the subsidiary's financial statements must include an unavailable reserve equal to the amount of the shareholdings in the parent
        
        d) shareholdings acquired in violation of these limits must be disposed of within one year of their acquisition
        
        e) the limits on acquisition may be exceeded where this is done free of charge, by universal succession, merger or division or by compulsory execution
        
        f) ) the limits on acquisition may be exceeded where this is done free of charge, by universal succession, merger or division or by compulsory execution
    - - information must be provided also for the controllated firms
    - - notion
        
        is prepared by the directors of the parent (controllante) company
      - Obligated subjects
        
        a) the S.p.A., S.a.p.A., and S.r.l. controlling an enterprise of any kind;
        
        b) public bodies having as their exclusive or main object an economic activity, cooperatives and mutual insurance companies controlling a joint-stock company;
        
        c) partnerships wholly owned by joint-stock companies controlling an enterprise of any kind.
      - The consolidation area
        
        companies over which another has the right, by a contract or a clause of the Articles of Association, to exercise a dominant influence
        
        companies in which another, based on agreements with other shareholders, alone controls the majority of voting rights
        
        Exemptions from consolidation
        a) when the inclusion would be irrelevant for truthful and correct representation;
        b) when the effective exercise of the parent company's rights is subject to serious and lasting restrictions;
        c) when it is not possible, in exceptional cases, to obtain the necessary information promptly, or without disproportionate expense;
        d) when their shares or quotas are held exclusively for the purpose of subsequent disposal (so-called trading).
        
        Proportional consolidation :question:
        
        Exemptions
        
        do not exceed
        . a) 20,000,000 Euros of assets
        . b) 40,000,000 Euros of revenues
        . c) 250 employees on average
        
        in the hypothesis of chain control with 95% of the shares
        
        only companies that can be excluded from consolidation in the cases just mentioned in Article 28 of Legislative Decree No. 127/1991 are controlled.
        
        The approval of the consolidated financial statements
        the Supervisory Board shall approve the consolidated financial statements
      - The function of the consolidated financial statements
        
        The consolidated financial statements have a merely informative function;
      - Disability
        There is no discipline with a minimum degree of organicity in the field of disability --> (same condition of financial statement Article 2409-quater)
- - - - Parent company shareholders and mega subsidiaries
        b) the progressive removal of the minority shareholders of the parent company from the power of control over the operating activities of the group
      - leverage effect
        a) the top management of the group can control the companies at the base of the pyramid with a lower financial cost
  - - - essential data of the parent company
        
        management report
        
        Obligation to motivate decisions influenced by the parent compan
  - - - Group interests and Interest of subsidiaries
        THE LAW TAKE IN ACCOUNT ALSO THE INTEREST OF THE GROUP
      - The abuse of unitary management
      - The responsible parties
    - - OBTAIN COMPENSATORY (MONEY) REMEDY USUALLY IS VERY COSTLY
      - alongside the compensation remedy THERE IS THE RIGHT OF WITHDRAWAL IN 3 CASES:
        
        a) significant structural changes in the parent company
        . 1) resolves a transformation that implies a change in his corporate purpose, and thus in essence a heterogeneous transformation
        . 2) resolves a change in the corporate purpose "allowing the exercise of activities that significantly and directly alter the economic and equity conditions of the company subject to management and coordination activities.
        
        b) the entry or exit in a group - as well as the change of the group leader when a public purchase offer is not promoted
        
        c) in the event of executive conviction of the parent company in favour of the shareholder for incorrect exercise of management and coordination activities
    - - The regulation establishes that the loan must be subordinated with respect to other creditors. In order for this subordination to be implemented, it is necessary for the loan to have been made at a time when, in view of the type of activity carried out by the company, there was an excessive imbalance between the debt and the shareholders' equity.
    - - THE LEGISLATOR WOULD LIKE TO INTRODUCE SOME RIGHTS OF CONTROL FOR MINORITY SHAREHOLDER (such as a special meeting for the decision of the parent company) BUT, SO FAR, THERE IS JUST A POSSIBILITY FOR THE SRL
- - - - companies in house --> analogous control
        exercise of decisive influence over both the strategic objectives and the significant decisions of the subsidiary,