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Company law in Germany and Italy

Clear company regulations right from the start to avoid conflicts later on

If you wish to set up a company in Italy or in Germany, we will assist you in choosing the legal form; we can explain the advantages and disadvantages of each alternative compared to solutions you are familiar with under your home law. We accompany you from the decision to form a company to its registration and can also carry out all the necessary legal acts on site with your power of attorney, without your personal participation being mandatory. We draft and translate the founding documents, the articles of association, the necessary shareholders' agreements and the managing directors' or board members' contracts into the respective languages and can recommend clauses from many years of cross-border experience which take into account the interests of all parties involved and also "hold" in the event of conflict.

Representation in case of conflict

Should a dispute arise, we have the appropriate know-how and experience to represent you before ordinary courts or arbitration tribunals. Typical disputes in corporate law are disputes between shareholders concerning the appointment of corporate bodies and the related type of corporate governance, the enforcement of rights to information or disagreements regarding the appropriation of profits. In the conflict between the company and the corporate bodies, the termination of the managing director's or board member's contract or the interpretation of bonus agreements are often the subject of litigation.

Specialized in Italian corporate law

Our lawyers specializing in corporate law were trained in Italy and Germany, are admitted to the bar in both countries and offer not only sound legal know-how on the differences in corporate law between Germany and Italy, but also the necessary sense for pragmatic solutions.

Our corporate law services in detail

  • We advise you on the choice of national and EU legal forms, draft all necessary and appropriate documents, such as articles of association, memorandum and articles of association, registration, and managing director's agreement, and also conclude all necessary legal transactions on your behalf as an authorized representative;
  • You will receive all drafts and documents bilingually, at your choice in Italian, German or in each case with an English translation.
  • Due to our network at our respective locations, we can also arrange for the necessary further service providers for the commencement of the company's activities, from the bank to the tax advisor;

  • We can already advise you on the selection of a suitable CEO for the company, pointing out not only the legal peculiarities of an employment contract in the respective law, but also the intercultural differences. Demands made by a candidate in a negotiation may be received incomprehensibly or even outrageously by a shareholder from another country, whereas they are perfectly normal against the background of the CEO's home country.
  • In the event of a conflict, we can point out the particularities of each case and, especially where national law sets mandatory deadlines (for example, in Germany in the case of termination without notice, which must be given within 14 days of knowledge of the important reason), ensure that the deadlines are observed.

  • If the partners do not agree on all points, a poorly prepared partners' meeting with a correspondingly contestable resolution can lead to protracted legal disputes. We can help you minimize this risk.

  • If you, as a minority shareholder, are of the opinion that the resolution passed should not have been passed, you must observe the time limits for contesting the resolution; we can also assist you in this area.
  • The same applies in the event that the management denies you the right to inspect the company's documents. We can enforce your company rights in court.

  • The conversion of a company into another legal form is provided for in all the laws of the EU Member States and we can assist you in this process;
  • For some years now, it has also been possible to move a company from one state to another while preserving its identity. We also have experience in this field and will be happy to assist you.

  • In this phase we can assist you from the decision to liquidate the company to the deletion of the company from the commercial register. In compliance with the rules of the respective member state, we can offer to act as liquidators on your behalf.

Free initial consultation?

Let us talk about your specific concerns.

Special features of company law in Italy

No employment contract with the CEO

Italy does not distinguish between the appointment of the CEO as a corporate body and the employment contract under private law. Rights and duties of the CEO are included in the appointment resolution by the shareholders' meeting. Premature termination of the mandate, except in the case of good cause justifying dismissal, is generally not possible; however, boards are often "dirigenti" at the same time, in which case they are protected by a collective agreement that is generally binding in practice.

Board of directors with operative active and with passive members

The classic Italian corporation, whether Srl (limited liability company) or SpA (joint-stock company) is represented by a Consiglio di Amministrazione (a board of directors), from which one member receives a mandate (delega) to manage the company. The "amministratore delegato" thus appointed is, in addition to the president of the company, usually authorized to represent the company and is often translated into German as "Geschäftsführer". The other members of the board of directors usually do not assume any operational tasks and are comparable in their function to members of a supervisory board.

Free choice in corporate governance

A reform of company law a few years ago introduced a choice of administrative and management systems, so that in addition to the classic monistic Italian model, a dualistic model based on the German model could also be chosen at the time of formation. The Italian founders hardly make use of this option and continue to found according to the classic Italian system. This is also due to the fact that the function of the German supervisory board is foreign to Italian company law. In addition to the Consiglio di Amministrazione, the company also forms a "Consiglio sindacale" which, however, mainly has an advisory and supervisory function, but is not hierarchically superior to the Consiglio d'Amministrazione.

Personal Liability of the Managing Director in the Absence of an "Organizational Model”

Italy has the oldest compliance law in the world (decreto legge 231/21). According to this law, managing directors are liable under criminal law, but also under private law with their assets, if an employee causes damage and the management cannot clearly explain the responsibilities in the company on the basis of a "modello organizzativo". The organs of the company, but also the responsible executive employees, are also liable for omissions in the area of occupational safety if, for example, a list of all occupational risks in the company has not been drawn up.

No obligation on the managing director to file for insolvency

However, Italian insolvency law - at least until now - does not impose a separate obligation on the managing director to file for insolvency. In principle, he is not liable out of his own assets in the event of an insolvency delay.

Company law peculiarities in Germany compared to Italy?

Are you Italian and are you interested in the specifics of corporate law in Germany? You can find information about this on the Italian version of this page.

Frequent questions from our clients

This can only be recommended if you have a trusted person in the Italian company who knows the special Italian requirements in company and labor law and makes sure that they are implemented. If the book on occupational safety is not kept properly and if, in particular, an organizational model has not been drawn up in which the responsibilities of all company employees are regulated, the liability of the executive bodies - and thus also of the "German" president - can arise.

You must realize that the board of directors of a German company is not a body provided for by law. For example, in the case of a GmbH, if several directors are appointed, you can form a "directors' council" or simply a "management board", which in turn can appoint a spokesperson or chairman. This would then correspond to the president of the Italian board of directors in his hierarchical function. Unlike the Italian board of directors (and the Anglo-American board of directors), however, all members are operational and can in principle represent the company alone or jointly with others. This could lead to undesirable liabilities. For example, the German managing director is subject to his own liability in the event of insolvency if he does not file for insolvency. All managing directors, whether operative or passive, are subject to this liability risk.

Yes! Irrespective of the risk of the purchase being contested, possibly by the subsequent insolvency administrator, in the case of a partial transfer of business in Italy, even in the case of an asset deal, the liabilities to creditors attributable to the partial business are also transferred. You are then not only obliged to take over the employees (this applies throughout the EU), but also the liabilities towards the suppliers.

Until a few years ago, this question was very popular because most German corporations did not publish their annual accounts. Only since the Federal Republic was ordered by the European Court of Justice to adopt a stricter approach have the annual financial statements been available free of charge on the website of the Federal Gazette (“Bundesanzeiger”). In addition, a transparency register has also been established since 2020, which offers the possibility of identifying the actual owner of the business shares or stock, i.e. the natural person, if this is not apparent from the commercial register.

Unfortunately, not at all. According to § 50 I HGB (German Commercial Code), the power of attorney of an authorized signatory cannot be restricted vis-à-vis third parties. This is also a reason for the great differences between Italian and German commercial register extracts. German commercial register extracts are very concise and usually consist of 2-3 pages. The Italian extracts from the commercial register extend to over 20 pages, and the rights of the authorized signatories and the rights of the members of the board of directors are set out in great detail. In the internal relationship, i.e. vis-à-vis the company itself, the power of representation can of course be limited.

Free initial consultation?

Let us talk about your specific concerns.