APPROPRIATE STRUCTURES IN THE LIGHT OF THE CODE OF COMPANY DISTRESS AND INSOLVENCY AND MODELS UNDER LEGISLATIVE DECREE 231/2002

With the introduction of the Code of Company Distress and Insolvency (hereinafter, the “CDI”), the legislator, in an innovative perspective to the problem, has intended to establish a company monitoring system, designed to promptly discover and manage crisis situation when it is still possible to take appropriate initiatives to overcome it. Therefore the primary purpose of this new system is the prevention of a company’s difficulties, by providing a series of obligations, not only for subjects inside the single entrepreneurial reality, but also external to it.

Among others, pursuant to the new art. 2086 of the Italian Civil Code, which entered into force on 16^th March 2019, for the purpose of accountability, an obligation on the entrepreneur that operates in corporate or collective form has been introduced to establish an appropriate organizational, administrative and accounting arrangements regarding the nature and size of the company, suitable for detecting, in good time, the state of crisis and the risk of losing business continuity, with the consequential further obligation of prompt adoption and implementation of the initiatives that the legal system provides in order to overcome the crisis and recover the business continuity.

The entrepreneur at the head of any corporate model has, therefore, the duty to set up organizational structures able to detect the indicators of the state of crisis pursuant to Art. 13 of the CDI, which are income, budgetary or financial imbalances, identifiable by using specific warning indices processed, every three years, by the National Council of the Order of Chartered Accountants and Accounting Experts and approved by a decree of the Ministry of Economic Development[1].

The adequacy of these organizational structures is supervised by the corporate control bodies, the accounting auditor and the auditing company, each within the scope of its functions, with the obligation to immediately report to the administrative body the existence of valid evidences of crisis.

The adequate organizational structures envisaged by the CDI seem to recall a paradigm already present in our system. We refer to Legislative Decree n. 231/2001 (hereinafter, “Decree 231”), that governs responsibilities of entities for administrative offences resulting from a crime and applies to entities and companies with juridical personality, as well as to companies and associations even without juridical personality.

As is well known, Decree 231 sets, as a cause of exclusion of entities’ liability, the preventive adoption and implementation, by the governing body, of organizational and management models suitable for preventing the crime actually committed. The task of supervising the functioning and observance of the model is assigned to the Supervisory Body, an entity characterized by autonomous powers of initiative and control. The functions of the Supervisory Body in capital companies can be undertaken by the board of statutory auditors, the supervisory board or the management control committee.

Without prejudice to the common aim of prevention and correct management of the company, the function of the adequate structures envisaged by the CDI, on the one hand, and the one of the models established by Decree 231, on the other hand, do not match.

However, because of the duty for entrepreneurs to review structural asset of companies in order to control the suitability, it is clear that it could be advantageous to evaluate, in this context, the implementation of the models established by Decree 231 (if already prepared) and/or the adjustment of the new structure in compliance with the CDI too, since the establishment of a business organization where monitoring and management are increasingly integrated and connected is becoming more and more important.

[1] Last October, the first document containing the warning indices processed by the National Council of the Order of Chartered Accountants and Accounting Experts was published, which is currently being examined by the Minister of Economic Development.

 

Author: Anna Tarasco

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Contributing Advisors