Mario Notari

Proportionality Between Risk and Power in Limited Companies: A Fundamental Principle or a Non-Mandatory Rule?

  • Abstract

Informations and abstract

Keywords: Multiple Voting Shares; One Share-One Vote; Voice Rights; Proportionality; Ownership; Control.

The subject of the article is related to the balance between shareholders' voice rights and contributions in Italian company law, in the light of the recent amendment of the rule «one share, one vote», by admitting public limited companies to issue multiple voting shares (article 2351 of Italian Civil Code, as amended by Decree 91/2014). The main question arising from this change is whether or not the proportionality between rights and contributions is still a binding principle in Italian company law. The article sustains that such a principle should be deduced from the current legal system, as a whole, and not from the traditional ideas that governed company law when the applicable rules where different. Otherwise those formers ideas would become «dogma» without a real ground in the legal system. The underlying idea is that the general framework of the Italian statutory law has changed the essential characteristic of the public limited company. PLCs are no more a rigid an unmodifiable model under which a business activity can be conducted, but a flexible and adaptable tool available for entrepreneurs. It is still the most important trading vehicle used to raise money to invest in business activity, but it has also become a «contractual» instrument at members' disposal in order to establish their economic agreements. In this context, it is not necessary to preserve the proportion between shareholders' voice rights and contributions at every cost. Proportionality, in other words, must be seen as a default rule, applicable unless differently agreed among the members, and no more an intangible principle with few and restricted exceptions.

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