Do foreign investors know what are the main basic legal requirements for a company newly incorporated in Italy to be compliant with the local laws and best practices?
We hereby summarize what are the main corporate governance rules and best practice to be followed when setting up a new company in Italy.
1. First of all, once the shareholders of a company sign the articles of association with the attached By-laws and appoint the management body, in the event that a board of directors is empowered, it is advisable that at the same time a meeting of the board of directors take place in order to grant to its directors appropriate delegation of functions and representative powers that will enable the directors to act in the name of the company to run the corporate business. On the other hand, in case the shareholders elect to manage the newly incorporated company through a sole director, such body shall be automatically invested by all the powers provided by the company’s By-laws in order to operate the corporate business. We recommend that such delegation also includes the power for directors to sub-delegate special attorneys in order to act in the name of the company for the day-to-day business.
2. Within the scope of the delegation of functions and powers, it is also prudent that since the very beginning of operations, the Board appoints and delegates all its responsibility arising out of Legislative Decree no. 81/2008 (setting out the rules on Health and Safety in Workplace) to the person in charge of such a duty within the company organisation, the so called “Datore di Lavoro” in order to avoid joint and several liability of all directors in case of accident at the workplace or breach by the employees of the rules applicable in this subject matter.
3. Another corporate best practice suggestion that a Board of Directors of a newco should take into consideration once appointed in Italy is to approve all set of rules and delegation of powers in respect of privacy and data protection matters, i.e. Regulation (EU) 2016/679 on General Data Protection Regulation (EU GDPR). in this respect, it is advisable to draft adequate data protection guidelines and effective organizational chart to design the data protection model to be applied with the company operations both internal (versus employees) and external (versus suppliers and other stakeholders).
The above are the main minimum requirements to be observed once incorporating a newco in Italy that can obviously be integrated by other corporate governance rules to be fully compliant with the Italian laws and best practice in force.