ITALIAN DISCIPLINE FOR SHARES SALES

Can the company assets be considered part of the shares sale?

Italian law has set specific principles to be applied to shares sales cases. It should be noted that in these specific sale and purchase agreements the actual object of the sale is constituted by the shares. Therefore the parties, vendor and buyer, will regulate in the agreement all the aspects connected to the share/s. Jurisprudence decisions over the last 20 years have established that in a shares sale further assets will also be part of the sale; in fact, all the corporate assets must be considered as being a part of the sale. This was established by the Italian Supreme Court of Justice aka Corte Suprema di Cassazione, starting from the early 1990’s. The reason for this specific ruling is connected with the rationale that all the company assets are directly connected with the shares and shareholders, even though the latter are able to make decisions about the assets only via the company’s internal management/organisation.
The shares are the object of the sale and purchase agreement, that will be immediately transferred, although the company’s assets, or a part of the same, are also part of the transfer, as indirect object, or what is described as “oggetto mediato” under Italian law.
Recently, Italian case has law has established an even wider principle, according to which all the company assets as well as the actual company business, must be considered as part of the shares sale and cannot be considered separate. This principle is also connected with article 2557 of the Civil Code, according to which whoever sells a business or business line, will refrain for the following five years from the transfer date, from starting a competitive business; this principle, always according to recent case law, must be considered applicable to shares sale, too.

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