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Obligation to Appoint the Control Body: New Limits

On February 14th 2019 the new Codice della crisi di impresa e dell’insolvenza – Decreto Legislativo 12 gennaio 2019 n. 14 – (Code of business and insolvency crisis) was published in the Gazzetta Ufficiale (Official Journal), implementing the legge delega n. 155/2017 for the reform of bankruptcy proceedings.

One of the most important news is certainly the extension of the obligation to appoint the control body, provided also for the small-sized companies.

In order to preserve the business continuity, in fact, the Legislator set that, at some conditions, also smaller companies shall appoint a special control body (i.e. Board of Statutory Auditors or Statutory Auditor) for the supervision and the company’s status analysis aimed at identifying those phenomena that can show a signal of a state of crisis.

The Legislator has therefore modified the art. 2477 of the Italian Civil Code, extending the appointment obligation to all companies that:

  • Are required to prepare a consolidated financial statements;
  • Control a company obliged to have an audit on its accounts;
  • Have exceed at least one of the following limits for two consecutive years (even several of them within the two years):
    • Total balance sheet assets: 2 million euros;
    • Revenues from sales and services: 2 million euros;
    • Employees employed on average during the year: 10 units.

It is important to underline that the dimensional parameters have been significantly reduced:

Art. 2477 codice civile

Ante Reform
Srl that for two consecutive years exceeds at least two of the following limits:

  • Total assets> 4.4 million
  • Revenues> 8.8 million
  • Average number of employees> 50

Post Reform
Srl that for at least two consecutive years exceeds at least one of the following limits (also different in the two years):

  • Total assets> 2 million
  • Revenues> 2 million
  • Average number of employees> 10

It is good to point out that the reform does not establish anything about the composition of the bodies: total freedom is therefore left to the companies regarding the choice to establish a Board of Statutory Auditors or a single statutory auditor or a statutory auditor (or auditing company).

If the company did not appoint a special control body, the local Court will do it, appointing an auditor registered in the register of statutory auditors.

The deadline to appoint, where necessary, the special control body is set on December 16th, 2019. Within that term, the company must also adjust its by-laws, if necessary.

Therefore, given that the aforementioned rule will come into force on March, 16th 2019 (pursuant to art. 389 of the decreto legislative), the compliance obligations must be fulfilled by December, 16th 2019, keeping as reference parameters the results of the financial years ended December 31st 2017 and as of December 31st 2018.

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Maria de Rosis's picture

Maria De Rosis is a lawyer enrolled in Milan lawyers’ Order. She has been working at Interconsulting Studio Associato since 2012 and she provides advice in civil and corporate law, civil litigation, insurance litigation and trademarks’ registration. 
She is also experienced in drawing up contracts and legal opinions. 

Areas of Practice

Economic Sectors