Contribution by avv. Niccolò Medica published on N&T Plus Diritto – Il Sole 24ORE.

Article 2382 of the Italian Civil Code establishes that a “bankrupt” person cannot be appointed as an administrator of a joint-stock company and that, if appointed, he shall be removed from office.

Unlike what occurs for joint-stock companies, the regulation of limited liability companies, following the 2003 amendment (Legislative Decree of 17 January 2003, no. 6), does not regulate the grounds for ineligibility and removal of administrators.

Over the years, a debate has emerged, at both doctrinal and jurisprudential level, regarding the possibility of extending the applicability of Article 2382 of the Italian Civil Code to limited liability companies as well.

The Third Section of the Court of Cassation, with judgment of 8 August 2013, no. 18904, clarified that “the regulation of limited liability companies, following the amendment of Legislative Decree of 17 January 2003, no. 6, does not regulate the grounds for ineligibility and removal of administrators, so that, with regard to them, the provisions laid down for joint-stock companies by Article 2382 of the Italian Civil Code no longer apply, not even by analogy, with the consequence that – unless otherwise provided in the bylaws – the bankruptcy of the administrator of a limited liability company does not determine his incapacity to hold office“.

Therefore, according to this ruling, the grounds for ineligibility and removal of administrators in limited liability companies are not governed by Article 2382 of the Italian Civil Code, but are left to the statutory autonomy recognized for this type of company.

Part of the lower court jurisprudence shares this view, according to which “the bankruptcy of the administrator of a limited liability company does not determine his incapacity to hold office, as the provision laid down by Article 2382 of the Italian Civil Code with regard to the administrator of a joint-stock company is not applicable to the administrator of a limited liability company” (in this sense, Court of Vicenza, Section II, 7 August 2020).

Of a different opinion, however, is the Court of Rome, which, most recently on 23 January 2018, reaches the conclusion that the administrator of a limited liability company, declared bankrupt, shall be removed from office.

The Rome court believes that the regulation of Article 2382 of the Italian Civil Code is intended to protect “not only the shareholders, but also the creditors and third parties who come into contact with the company”: consequently, the protection of corporate assets requires, also in limited liability companies, the absence, on the part of administrators, of situations “suitable to negatively affect the capacity and integrity of those entrusted with the management function“.

Moreover: according to the Court of Rome, in the internal relationships between administrator and company there are no differences between the two types of capital companies in question that could justify two different regulations; Article 2382 of the Italian Civil Code therefore contains a principle of general scope.

On this point, the First Section of the Court of Cassation has again – and recently – expressed itself with judgment of 16 September 2021, no. 25050: the Supreme Court has indeed reiterated the conclusions adopted by the Third Section with the judgment of 8 August 2013, no. 18904, but has also provided detailed reasoning for its decision.

According to the Court of Cassation, it is true that the legislator of the 2003 reform did not regulate the grounds for ineligibility and removal of administrators of limited liability companies, but neither did it provide for a reference to the provisions laid down by Article 2382 of the Italian Civil Code for joint-stock companies, as provided for by the previous Article 2487 of the Italian Civil Code.

Consequently, “however cryptic the silence maintained by the legislator on this matter may appear (but it must not be forgotten that many times the silences of the legislator in the reform of the limited liability company express the indication to leave “an open hand” to statutory autonomy), in this transition it seems correct to read, in any case, a legislative intent aimed at not following anymore – certainly not repeating it in a slavish manner, in any case – the regulatory scheme adopted for the joint-stock company“.

The observation that the ineligibility and removal of the bankrupt from the position of administrator of a limited liability company would respond to the perceived need to protect third parties was not shared either (thus, in fact, contrasting with the approach adopted by the Court of Rome): indeed, the Court of Cassation expressly highlighted that “it is a matter of common experience (…) that the circumstance of “not being bankrupt” does not entail any assurance of the administrator’s patrimonial capacity should he violate the duties connected to the performance of the task entrusted to him“, that “the capacity (and responsibility under Article 2740 of the Italian Civil Code) of the bankrupt remains intact if only for assets that are not included in the bankruptcy” and, above all, that “the bankrupt is not prohibited from undertaking alone the pursuit of new business activities, as has been noted on several occasions by the jurisprudence of this Court“.

The Supreme Court does not share either the assumption that the extensive application of Article 2382 of the Italian Civil Code to limited liability companies would be justified by reasons of “consistency of the corporate system“: moreover, with the 2003 reform, the relationship between the two types of companies has changed, as the regulation of limited liability companies “moves in the direction of a comprehensive revision” of the relative model, intending to “offer economic operators an instrument characterized by significant and accentuated flexibility and which, fundamentally based on a consideration of the persons of the shareholders and their personal relationships, is aimed at satisfying needs particularly present in the context of small and medium-sized enterprises“.

Therefore, according to the Court of Cassation, the differences between the joint-stock company model and the limited liability company model justify a different regulation regarding the grounds for ineligibility and removal of those required to administer them.

In conclusion, according to the most recent ruling of the Court of Cassation, even a person who has been declared bankrupt may, in limited liability companies, be elected and remain in the position of administrator, unless – obviously – different statutory provisions which, given the flexibility granted to limited liability companies, are certainly permitted.