Italian companies: a Guide to SPA for Foreign Investors and CEOs

Italian companies: a Guide to SPA for Foreign Investors and CEOs

After discussing the Italian limited liability company, it is time to talk about the so called società per azioni (joint stock company) or SPA, the form of Italian companies often chosen by multinational companies entering the Italian market.

General aspects of SPA

SPA share many aspects of the SRL and so:

  • its structure and governance are flexible and adjustable to the shareholders’ needs;
  • it is a limited liability legal entity;
  • it  is regulated by the Italian Civil Code, by the Articles of Association and by the By-Laws;
  • in order to be established, the prospective shareholders need to appear before a Notary Public.

The minimum share capital of the SPA is € 50.000,00.

SPA: liability of the shareholders

Shareholders of a SPA may be individuals or legal entities.

The shareholders are not liable for the debts of the SPA: their liability is limited to the contributions paid-in in the SPA (whether in kind or money). If the SPA is owned by a sole shareholder, the limited liability rule does not apply unless the contributions are entirely paid-in and proper disclosure of this status is given to the public.

SPA: rights of the shareholders

Each shareholder has the right to be informed about the business activities and the assets status of the SPA. Such a right is however limited to circumstances arising out of the balance sheet.

Shareholders representing certain percentages (rights of the minorities) may exercise other rights such as lawsuit against directors for damages, invalidity of the shareholders assembly decisions, summoning of the shareholders assembly, revocation of the directors, liability  

SPA: exit from the company

Shareholders can not withdraw from the SPA as they please. The possible exits are the following:

  • sale of the stocks according to contractual agreements with a third party (sale and purchase agreements, put/call option rights or tag/drag along rights);
  • withdrawal right if the relevant trigger events occur;
  • winding-up of the company: this leads to the extinction of the company.

SPA: shares

Shareholders’ contributions are represented by stocks (azioni under Italian law). Contributions can be money, credits and goods. The shareholder’s rights are proportional to the number of the owned stocks but the By-Laws may provide otherwise.

In principle, stocks can be freely transferred to third parties, but the By-Laws may provide limitations such as pre-emption right, lockdown period, internal approvals.

Stocks may be issued in different forms and with different rights attached to them.

In case of a capital increase, each shareholder has an option to acquire the new capital in proportion to the owned stocks in order to avoid dilution.

The SPA may purchase its own stocks according to specific limitations.

SPA: corporate governance

SPA comprises three main bodies: shareholders assembly, managing body and internal auditor. Under certain circumstances, there might be an external auditor.

With reference to the actual structure of management body and internal auditors, SPA may adopt either one out of three options known as (i) traditional system, (ii) one-tier system and (iii) two-tier system.

Shareholders assembly

The shareholders assembly main powers are the following:

  • appointment of the managing body;
  • appointment of the internal or external auditors (unless the one-tier system is applied);
  • approval of the balance sheets (unless the two-tier system is applied);
  • dividends distribution;
  • decision about the winding-up of the company;
  • amendments to the By-Laws.

The shareholders assembly is summoned by the managing body or the internal auditors with a written communication setting agenda, place, date and time of the meeting.

The shareholders assembly may be ordinary or extraordinary depending on the matters at stake.

The ordinary shareholders assembly is validly held when at least half of the share capital is present. Decisions are taken by simple majority of the share capital present at the assembly. Decisions of the extraordinary shareholders assembly are taken with the positive vote of more than half of the share capital. The By-Laws may set higher majorities.

If the entire share capital and the majority of both managing body and internal statutory auditors are present, a shareholders assembly can be held with no previous written convocation (assemblea totalitaria under Italian law).

The traditional system

In the traditional system, the shareholder assembly appoints both the managing body and the Statutory Internal Auditors (Collegio Sindacale under Italian law).

The managing body may be a Sole Director (Amministratore Unico under Italian law) or a Board of Directors (Consiglio di Amministrazione under Italian law).:

The managing body has the duty to manage the company in a profitable and compliant way whereas the Statutory Internal Auditors has the duty of management and accounting audit.

When a Board of Directors is appointed, the Directors elect the Chairman if the shareholders assembly did not appoint it. Usually, the Board of Directors appoints one or more Managing Director(s) (Amministratore Delegato under Italian law) with powers limited to specific areas, activities or functions.

The Chairman has the duty to summon the Board of Directors with a written communication stating the agenda, place, date and time of the meeting. The Board of Directors meeting is validly held when at least half of its members are present. Decisions are usually taken by simple majority of the present directors. The By-Laws may provide for higher majorities.

The managing body is not liable for the company’s debts unless they acted with negligence or willful misconduct. In this case, shareholders and third parties may seek damages.

The Internal Statutory Auditors, formed by three or five professionals, is in charge of monitoring (i) the compliance with the law and By-Laws, (ii) the compliance with the adequate management principle and (iii) the suitability of the organisational, administrative and accounting structure as well as its operation.

If the SPA drafts a group balance sheet, the accounting audit is assigned to external auditors. Otherwise it may be performed by the Statutory Internal Auditors.

One-tier System (sistema monistico under Italian law)

In this corporate governance model, the shareholders assembly appoints the Board of Directors which, in turn, appoints a Management Supervisory Board (Comitato per il controllo sulla gestione under Italian law) among its members.

The Management Supervisory Board shares the same duties and powers of the Internal Statutory Board.

The accounting audit is assigned to external auditors appointed by the shareholders assembly.

Two-tier System (sistema dualistico under Italian law)

The shareholders assembly appoints the Supervisory Board (Consiglio di Sorveglianza under Italian Law) which is formed by at least three persons. The Supervisory Board has the same role of the Internal Statutory Auditors plus certain powers of the shareholders assembly such as approval of the balance sheet.

The Supervisory Board appoints the Management Board (Consiglio di Gestione under Italian law) formed by at least two persons not members of the Supervisory Board. This body has the duties and powers of the Board of Directors.

The accounting audit is assigned to external auditors appointed by the shareholders assembly.


The present post does not cover the complexity of SPA in its entirety, but it gives a general but, hopefully, effective picture of its main characteristics and numerous facets.

Next post will be on innovative start-ups and that is where the fun begins.

About the Author: Raffaele Battaglini (LLM. at The University of Edinburgh) is a lawyer expert in international contracts, innovation, M&A deals and start-ups.

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