Ownership and Management in the EU Inc. (Amministrativ@mente - Rivista di ateneo dell’Università degli Studi di Roma “Foro Italico”)

Summary

• Article 42 grants the general meeting authority to give instructions to directors that remain binding unless contrary to applicable legal rules.p.11
• Distributions require all directors to sign a statement certifying compliance with the balance sheet test and solvency test for the 12 months following distribution.p.14
• Article 52 grants minority shareholders a withdrawal right when company management is conducted in an oppressive manner.p.17
• Italian innovative startups face a statutory 5-year prohibition on profit distribution before accumulated profits can be distributed.p.25

Key insights

1. The EU Inc. framework introduces a confederative model that sits atop existing company law regimes across all Member States.p.4
2. Directors acting in accordance with a lawful resolution of the general meeting are shielded from internal liability toward the company.p.11
3. The business judgment rule protects directors who make good-faith decisions with reasonable care in the best interest of the company.p.11
4. Distributions place direct financial liability on directors if they violate balance sheet or solvency requirements.p.15
5. Shareholders who intentionally authorize or decide harmful management acts incur joint liability alongside directors.p.13
6. Minority shareholders receive dedicated protection through withdrawal rights in severe cases of oppressive management behavior.p.17