Cancellation of the company and succession phenomenon: commentary on Ordinance No. 11411 of 2024

The recent Ordinance No. 11411 of April 29, 2024, by the Court of Cassation offers significant insights into understanding the legal consequences of the cancellation of a company from the business register. In particular, the Court focused on the effect of the company's extinction and the resulting succession phenomenon, clarifying some fundamental aspects regarding the active and passive relations of the extinguished company.

The regulatory context and the ruling

After the reform of corporate law introduced by Legislative Decree No. 6 of 2003, the cancellation of a company from the business register does not automatically imply the cessation of every legal relationship. According to the Court, a succession phenomenon occurs, in which the company's obligations do not extinguish but transfer to the shareholders. This means that the shareholders are liable for the debts of the extinguished company to the extent of what has been collected during liquidation or indefinitely, depending on their liability.

Cancellation of the company from the business register - Effects - Extinction of the company - Consequences - Active and passive relations - Succession phenomenon - Existence - Limits - Case law. 159388 COMPANIES - OF NATURAL PERSONS (DEFINITION, CHARACTERISTICS, DISTINCTIONS) - IN GENERAL Generally. After the reform of corporate law, implemented by Legislative Decree No. 6 of 2003, if the extinction of the company, whether of persons or capital, following the cancellation from the business register, does not correspond to the termination of every legal relationship pertaining to the extinguished company, a succession-type phenomenon occurs, whereby: a) the obligation of the company does not extinguish, as this would unjustly sacrifice the right of the social creditor, but transfers to the shareholders, who are liable, to the extent of what has been collected following the liquidation or indefinitely, depending on whether, during the company’s existence, they were limited or unlimitedly responsible for the company's debts; b) the rights and assets not included in the liquidation balance sheet of the extinguished company transfer to the shareholders, under joint ownership or undivided co-ownership, excluding mere claims, even if asserted or assertable in court, and uncertain or illiquid credits, whose inclusion in said balance sheet would have required further activity (judicial or extrajudicial), the failure of which by the liquidator allows for the assumption that the company has waived them, in favor of a quicker conclusion of the extinction procedure.

The practical implications of the ruling

The Court's decision has significant practical implications for the shareholders of an extinguished company. In particular, the following aspects must be considered:

  • The company's obligations do not extinguish with the cancellation but are transferred to the shareholders;
  • The shareholders are liable based on their limited or unlimited responsibility;
  • The assets not included in the liquidation balance are transferred to the shareholders under undivided co-ownership;
  • Claims and uncertain credits are not transferred to the shareholders unless they have been included in the balance sheet.

This ruling emphasizes the importance of proper management of liquidation procedures and the need for careful planning in the event of the company's extinction. In fact, the failure to include certain assets or rights may result in waivers, with direct consequences for the shareholders.

Conclusions

In conclusion, Ordinance No. 11411 of 2024 represents an important clarification regarding the cancellation of companies and the succession phenomenon. It reiterates the need for adequate attention from shareholders in managing their responsibilities, highlighting how the legal consequences of cancellation should not be underestimated. It is essential for legal professionals and entrepreneurs themselves to delve into these aspects to avoid surprises and ensure proper management of their obligations and rights.

Bianucci Law Firm