Art. 2476, par. 2, of Italian Civil Code and holding companies
Between legitimate enforcement of the right and abuse of it
It is well known that article 2476, paragraph 2, of the Italian Civil Code, provides the right of the quota holder of a limited liability company to ask information about the business of the company and to make inspections in order to verify the related documentation. The enforcement of such right, with the only limitation of the exercise in good faith, does not require that the quota holder proves that such enforcement is useful for him and does not imply the starting of a lawsuit against the directors.
Until a few years ago the case law was focused to find a balance between the quota holder’s interest in being informed with the company’s interest in keeping its “sensitive” and confidential information confidential. Even if the Courts resolved the above-mentioned conflict of interests in favor of the quota holder, the increasing importance acquired by the S.r.l. in the Italian market has shifted the focus of the debate.
Indeed, it is important to take into account that this right, granted to each quota holder, was originally connected to the nature of the S.r.l. (Ltd), considered as a partnership with limited liability in which each quota holder was considered as an active part of the company. The wide diffusion of the S.r.l., not only among small and medium enterprises, jointly with the recent regulatory changes that have taken this type of company to the capital market, brings this right on a different and wider level that concerns not only the company directly involved, but all the companies controlled by the former in all cases where the assets of such company include shares or quotas of other companies.
For the reasons briefly explained above, today the most discussed issue concerns the limits of the quota holder’s right to inspect the company – directly subject to the control – which controls other companies. It is clear that in such a circumstance the question is whether or not the quota holder’s control right is also extended to the subsidiaries of the company immediately subject to such control. The concern related to the question is even greater if we consider that the companies controlled may also be S.p.A. (PLC) whose regulation, as known, does not provide a shareholders’ inspection right.
The ruling of the Companies Section of the Court of Turin dated 5 March 2019 represents the continuation of a more open leaning – started by a 2017 ruling issued by the Companies Section of the Court of Milan – according to which the quota holder’s right of inspection exercised over the parent company can be extended to the companies controlled by the former only if the management of such controlled companies is centralized in the parent company.
The above is clearly expressed by a statement of the above-mentioned ruling, which identifies the limit of the quota holder’s right of verification to the documentation “reasonably necessary or actually examined/used for the exercise of its functions by the BoD of the company subject to the power of inspection and consequently to be considered in the material legal availability of such [parent] company“.
However, it remains awkward to define what exactly the BoD of the parent company should know about the management of the subsidiaries. Of course, in theory, and in general, the BoD shall be responsible for the general management/strategic choices of the subsidiary, but not also for the operational activities that are locally performed.
On one end, the reference to the centralized management, as the criteria for determining the limit of the quota holder’s right of verification, resolves a conflict between opposed interests, but on the other hand, it is a criteria that must be carefully evaluated from time to time, taking into account the real entrepreneurial independence of the subsidiaries.
The need to anchor the above-mentioned criteria to facts is also confirmed by a recent ruling of the Companies Section of the Court of Turin, also issued in 2019, which clearly refers to the corporate scope and to the activities actually carried out by the parent company.
