Italian company law: Unpaid management positions in corporations are permissible if provided for in the articles of association

In its ruling No. 825/2025 of January 30, the Milan Regional Court (Tribunale di Milano) confirmed the admissibility of a provision in the articles of association that provides for the unpaid exercise of the office of managing director. Referring to Articles 2364(1)(3) and 2389 of the Italian Civil Code (Codice Civile), the court clarified that these provisions do not contain any obligation to remunerate managing directors. Rather, the shareholders' meeting or the articles of association may lawfully stipulate that the office is to be held on an honorary basis and without remuneration.

The relationship between the managing director and the company is organic in nature and therefore cannot be equated with an employment or service contract. Therefore, neither Article 36 of the Italian Constitution (right to adequate remuneration) nor Article 409 of the Italian Code of Civil Procedure apply. By accepting the office, the managing director agrees to the provisions of the articles of association, including any provision regarding non-remuneration, and thereby waives any claim to remuneration, unless the shareholders decide otherwise.

The unpaid performance of the management function is lawful if it is expressly stipulated in the articles of association or determined by a shareholders' resolution, in accordance with the freedom of contract under company law.

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