Capital Law: the possibility of holding the shareholders' meeting in hybrid form and news on dematerialisation of S.r.l. - SME shares

The Capital Law (Law No. 21 of 5 March 2024), which came into force on 27 March 2024, lays down legislation to promote the competitiveness of financial markets and to initiate the substantial reform of the provisions laid down in this area.

The main objective, pursued by the Legislator, appears to be twofold: if on the one hand it aims, in fact, to promote the growth of the internal capital market, on the other hand and at the same time, it pursues the aim of increasing its competitiveness at international level.

To this end, the law in question regulates several measures, either by introducing innovative ones and by taking up the provisions of previous legislative acts.

Among the measures of general interest, it is worth mentioning the provision of Article 11, which establishes the postponement to 31 December 2024 of the deadline set forth in art. 106, par. 7, of Legislative Decree no. 81 of 17 March 2020 (1).

The mentioned postponement is to the "Cura Italia" Decree, which, in order to cope with the emergency caused by the Covid-19 pandemic, had introduced, for companies, the innovative possibility of holding shareholders' meetings by electronic means, as well as the possibility of expressing their votes electronically or by correspondence.

Given the pandemic contingency that had caused the adoption of these measures, it was expected that they would be in force until 31 July 2021.

However, in light of the results of those innovations, the aforementioned deadline was extended, several times and most recently, as a result of the Milleproroghe Decree, to 31 April 2024.

The Capital Law, therefore, in continuity with the measures adopted in the emergency circumstance, provides that, until 31 December 2024, it will be possible to:

• provide, in the notice of call of ordinary and extraordinary shareholders' meetings of i) S.p.A., ii) S.r.l., iii) cooperative companies and iv) mutual insurance companies, also in derogation of the different provisions of the bylaws, that shareholders may express their vote electronically or by correspondence and that they may attend the meeting by means of telecommunications;
• also provide that the above-mentioned meetings are held exclusively by means of telecommunications, capable of guaranteeing (i) the identification of the participants, (ii) their participation, and (iii) the exercise of voting rights, without the need for the chairman, secretary or notary, if any, to be present in the same place.

Some have seen in this provision the recognition at legislative level of the possibility of holding virtual meetings, i.e.  without a physical place of convening.

 On the basis of the foregoing, it is clear that the Capital Law pursues the purpose of encouraging the use of innovative technologies and modern working methods, clearly simplifying the conduct of meetings and the exercise of voting rights, since, by making the physical presence of shareholders optional, it almost completely eliminates the risk of postponements (due to lack of quorum formation constitutive and/or deliberative resolution, provided for in the articles of association) of the shareholder’s meetings, thus facilitating, in practice, the functioning of the company, the pursuit of the corporate purpose as well as the operation and productivity of the company itself.

Another aim of the recent capital markets reform concerns national economic growth and development by increasing the liquidity of assets held in limited liability companies. To achieve this objective, the Capital Law introduced, in Article 3, the possibility for S.r.l. – SMEs to issue their shares in dematerialized form, pursuant to art. 83-bis of the TUF (Legislative Decree 58/98). Dematerializing the shares of the S.r.l. means allowing the transition from paper to digital form, facilitating exchanges between investors and increasing investments in unlisted companies.

About the amendments made by the new regulations, first, it should be noted the introduction of paragraphs 2-bis, 2-ter and 2-quarter to Article 26 of Legislative Decree 179/2012, containing provisions (also) on SMEs.

Already through the second paragraph of Article 26, in fact, the legislator had already provided, in terms of measures for the growth and development of  innovative start-ups, the possibility for SMEs, established in the form of limited liability companies, to "create categories of shares with different rights", as well as, within the limits imposed by law, to determine their content, even in derogation of the provisions of the code,  that, in Article 2468 of the Italian Civil Code, states that "the corporate rights are due to the shareholders in proportion to the shareholding held by each one" (2).

Paragraph 2-bis of Article 26, introduced by the new reform, provides, with reference to the shares belonging to the categories provided for in paragraph 2 (i.e. "categories of shares with different rights"), if they have "equal value and conferring equal rights", that they may be issued in dematerialized form. The following paragraph 2-ter also provides that these categories of units are subject to the rules provided for by the TUF on the centralized management of financial instruments.

In addition, for S.r.l.-SMEs that choose to issue shares in dematerialized form, pursuant to paragraph 2-quarter, the mandatory keeping of the shareholders' register is envisaged, the results of which must be made "available to shareholders, at their request, also on computer support in a commonly used format".

The new regulation, therefore, introduces an alternative and digitized model of circulation of shares, offering greater benefits to both companies and investors.

Finally, the aforementioned Article 3 also intervened on Article 100-ter of the TUF, introducing the possibility that shares in S.r.l. may be offered to the public also through crowdfunding platforms, derogating from the prohibition placed on this point by Article 100-ter of the TUF, introducing the possibility that shares in S.r.l. may be offered to the public also through crowdfunding platforms, derogating from the prohibition provided for in Article 2468, paragraph 1, of the Civil Code.

Through this forecast, therefore, an important step is expected (and hoped) for Italian small and medium-sized enterprises both in terms of financing and development.

In conclusion, in the light of the ratio pursued by the Legislator in the adoption of the aforementioned measures, as well as the heading of Article 3 ('Dematerialization of shares of small and medium-sized enterprises') and the rules contained therein, the possibility that this legislation may be extended to limited liability companies which, due to their large size, fall outside the scope of SMEs is excluded.

Dott. Pasquale Ambrosio Cepparulo 

Dott.ssa Federica Lo Presti

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(1) Converted, with amendments, by Law no. 27 of 24 April 2020.

(2) Article 2468 of the Civil Code also provides that "unless the articles of association provide otherwise, the shareholdings of the shareholders shall be determined in proportion to the contribution. This is without prejudice to the possibility that the articles of association provide for the attribution to individual shareholders of rights concerning the management of the company or the distribution of profits”.