Just as the Parmalat financial scandal was beginning to unravel, the Italian Civil Code’s corporate law provisions were undergoing a major overhaul. While the timing of the legislative amendments was unplanned, some of them were remarkably well-timed.
The new law, which came into force on 1 January, 2004, amends the rules with respect to corporate limited liability protection of controlling shareholders and imposes on controlling shareholders new duties towards the corporation (thus, indirectly, towards creditors) and minority shareholders. It also subordinates, in certain circumstances, the controlling share-holders’ loans to the loans of other creditors and mandates new information reporting requirements on controlled corporations.
