The withdrawal from partnership of limited company with an excessively long duration
The Italian Supreme Court with the ruling number 4716 of the last 21st of February has stated on the exercise of the right of withdrawal in the corporate area, in particular with regard to a joint-stock company whose duration had been fixed until 31st December 2100 and whose Articles of Partnership expressly excluded the right of withdrawal by shareholders.
The Supreme Court reaffirmed the need to give due prominence to the legislator’s choice to provide for a different set of rules for withdrawal ad nutum in partnerships and joint-stock companies.
In the former, in fact, where intuitus personae prevails, Article 2285 of the Italian Civil Code gives the shareholder the right to withdraw from the company when it is contracted for an indefinite period or for the whole life of one of the shareholders. The rationale of this discipline lies in the possibility for creditors to claim not only on the company’s assets but also on the personal assets of shareholders with unlimited liability.
In the case of joint-stock companies, on the other hand, the right of withdrawal ad nutum is provided only if the company has been contracted for an indefinite period of time; nothing is provided for in the different case in which the Statute of a company provide for a duration of the company exceeding the average duration of human life. This regulation is justified by the need for certainty and protection of the interests of creditors, who can only rely on the company’s assets, which, therefore, could be reduced if the shareholder withdraws.
Therefore, the need for a restrictive interpretation of the rules on the withdrawal of the shareholder of an equity company because of the prevailing interest of the company in the preservation of the share capital.
The decision is therefore based on two arguments.
First, it distinguishes between mandatory withdrawal causes pursuant to Article 2437, paragraph 1 of the Italian Civil Code and withdrawal causes that can be derogated from the Articles of Partnership to the second paragraph of Article 2437 (which also includes the hypothesis of extending the duration of the company). The shareholder, therefore, as in the case in point which is the subject of attention by the Supreme Court, cannot complain if the Articles of Partnership have excluded the exercise of the right of withdrawal following the extension of the term of the company’s duration unless such decision has been taken by means of a shareholders’ resolution in which the same has not participated.
Secondly, the Court considered that a literal interpretation of Article 2437 of the Civil Code was necessary, which strictly limits the possibility of withdrawing ad nutum only in the case of a company contracted for an indefinite period.
It follows, therefore, that the provisions of Article 2437, paragraph 3, of the Italian Civil Code cannot be applied to the shareholder of a company which, although it has been contracted for an excessively long time, has in any case a fixed term.