S.p.A. with excessive duration? It is indefinite
With the recent sentence of May 5, 2022 (click here to read it), the Special Section for Companies of the Court of Milan ruled on the right of immediate withdrawal of shareholders from a company, the term of which has been set too far in time.
The duration of the company
In the deed of incorporation of a company, in addition to the indication of the shareholders, the registered office and the corporate purpose, the term within which the company will be dissolved is usually also indicated.
It is usually established in relation to the corporate objectives (once achieved, the company should cease its activity). For this reason, when it is not indicated, the duration of the company is considered indefinite.
In the latter case, individual shareholders have the right to withdraw at any time, communicating their will to the directors.
The withdrawal of the shareholders of a S.p.a.
In joint-stock companies established for an indefinite period, not listed on the market, art. 2437 paragraph 3 of the Italian Civil Code requires that members be able to withdraw ad nutum (ie without the obligation to give reasons) with notice of at least 180 days (or up to one year, if provided for in the articles of association / statute).
If, on the other hand, the deed of incorporation prescribes a term of duration, the shareholder may exercise the right of withdrawal only in the presence of one of the causes indicated in the aforementioned article (e.g. transformation of the company, transfer of the registered office abroad , extension of the term of duration, etc.).
However, if the deed of incorporation/statute provides for a remote term (eg: year 3000), the problem arises of which discipline to implement. If it is considered a reasonable term, it would oblige the shareholders to withdraw from the company only in the presence of one of the causes indicated in art. 2437, 1st paragraph.
The excessively long term
The Court of Milan, in the aforementioned ruling, addressed precisely this question, conforming to that jurisprudential orientation that considers a company established for an indefinite period whose term of duration has been set too far in time (Cf., among all, Supreme Court, Sentence no. 9662 of 2013).
The judges, in fact, on the one hand recalled that art. 2437 of the Italian Civil Code does not provide for “an objective and predefined parameter” to establish when a fixed term should be considered excessively long (such as, for example, the duration of human life, provided for by art. 2285 of the Italian Civil Code for partnerships).
On the other hand, adhering to the previous orientation, they considered “indefinite” the duration of the company whose termination term “exceeded any reasonable forecast of duration … as a legal person, resulting … completely arbitrary and irrational” and, therefore, “elusive, apparent or insignificant”.