The increased Powers of the Shareholders’ Meeting under the new Law 31/2014, which amends the Companies’ Act with the aim of strengthening the corporate governance:
The reformed law has extended the competences and involvement of the General Meeting. This change increases the powers of the General Meeting. Namely, it requires its approval for all the major corporate transactions that have a similar effect to structural changes such as acquisitions, divestments and contributions of core assets to other companies. “Core assets” are assumed to be when the transaction amount exceeds 25% of the value of the assets stated in the latest approved balance sheet.
As a result, in transactions in which core assets are transferred or acquired, the board members must establish whether or not the operation in question is desirable. This forces them, and in turn allows the shareholder, to be fully informed of the importance and repercussions of such a decision. In this sense, the General Meeting acquires a power that prior to the amendments was strictly within the scope of the Board of Directors of the Company, so long as it had regard to the corporate purpose of the company.
To determine what core assets are, the legislation applies objective criteria of a quantitative nature. It chooses this criterion instead of that which was recommended by the Unified Code . This recommended that competence was given to the General Meeting in situations which involve a structural change to the company. The choice of a quantitative criterion can cause problems in practice because it is difficult to attribute a definitive value to core assets. Furthermore, left to the General Meeting, agreements of this type may affect the corporate purpose and could entail a structural change.
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