The new principles issued by the Notarial Council of Milan on November 23, 2021, address:
- statutory penalties and the liquidation of shares in the event of redemption or exclusion (principle no. 198);
- limits, methods, and communication for condition precedents or subsequent (principle no. 199);
- the clauses in the bylaws that allow the opportunity to call meetings exclusively by means of telecommunications (principle no. 200).
Principle no. 198
The Notarial Council of Milan states that the bylaws may provide for penalties or other detrimental consequences for a shareholder who fails to comply with certain obligations included in the bylaws.
For example, a penalty clause may be combined with:
- limitations on voting rights;
- change of share category;
- exclusion from the company.
Principle no. 199
This principle deals with the legality of imposing conditions precedent to or conditions subsequent to the resolutions of equity-holders’ meetings and board of directors’ meetings of both joint-stock companies and limited liability companies, in relation to amendments to their bylaws.
Pursuant to Art. 2436, paragraph 5 of the Italian Civil Code, amendments to the by-laws are effective upon their registration in the Register of Companies.
Therefore, it is not possible for an amendment to by-laws to be effective before it is registered, but it is possible to defer its effects to a later date, subject to the occurrence of future and uncertain event(s).
According to the principle:
- resolutions may be subject to conditions;
- when a condition occurs, the directors must file the amended bylaws with the Registrar of Companies (no further resolution is required);
- the effects of the condition are not retroactive, and therefore the resolution will be effective upon occurrence of the condition.
Principle no. 200
The last principle deals with the legitimacy of clauses in the bylaws providing for the possibility to call meetings exclusively by means of telecommunications, omitting indication of the physical location of the meeting.
The Notary Council of Milan confirmed that the bylaws may provide that an equity-holders’ meeting or board of directors’ meeting may be held exclusively by means of telecommunications, in which case the relevant call notice need not indicate a physical location for the meeting.
This type of meeting takes place entirely on a virtual platform, without the need for any of the participants to go to a specific meeting place, since a virtual platform is accessed via Internet connection. Therefore, the call notice should include access credentials, and the chair of the meeting must verify the identity and legitimacy of the attendees and ensure that all parties can participate actively and vote.
The principles are available at the following link: https://www.consiglionotarilemilano.it/societa/massime-commissione-societa/