Company liquidation in Italy
Company Liquidation in ItalyUpdated on Friday 19th April 2019
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Under the Italian Civil Code, a company can be liquidated under specific terms. Company liquidation can happen only if:
- - the company was established for a limited amount of time,
- - the company’s capital was reduced below the minimum required by the Commercial Law,
- - the company cannot function anymore due to significant losses.
Company liquidation in Italy can be voluntary or compulsive.
Voluntary company liquidation in Italy
Italian companies may be voluntarily wound up under the specifications of the Company Act. The first step to voluntary striking off is to announce the Italian Commercial Register which will place the company under “pending dissolution” for one calendar year in order to make sure all the creditors are paid. The Italian company’s directors must follow the next steps for company liquidation:
- - to call a shareholders’ meeting,
- - a public notary must attend the shareholders’ meeting,
- - to decide the company liquidation,
- - to appoint a liquidator.
The shareholders will decide how the liquidation procedure will be carried out with respect of management throughout the winding up period and payment of the creditors. During the winding up period, the liquidator will be in charge with all the business undertakings of the Italian company.
In order to avoid problems, it is advisable to verify with an Italian law firm the steps of voluntary liquidation.
Compulsory liquidation in Italy
Compulsory winding up of a company can be requested by the debtors, creditors, a prosecutor or an Italian court. Compulsory liquidation usually happens when a company can no longer pay its debts and faces bankruptcy. Under compulsory liquidation the shareholders of the Italian company must file all the business’ financial records for the last three years, an assessment of the company’s activities and a list of the creditors with the High Court of Justice. The Italian company is declared bankrupt and the Court appoints a receiver to make an inventory and administer the corporate assets of the business. Within 60 days from the bankruptcy, the receiver must submit a liquidation calendar.
Both voluntary and compulsory company liquidation procedures end with de-registration of the company with the Italian Commercial Register.
For more information on both types of company winding up methods, please contact our lawyers in Italy.