Italy - Interest in Bringing Legal Proceedings While Challenging a Shareholders’ Resolution to Approve the Company’s Financial Statements

By decision No. 21238, dated July 23^rd, 2021, the Italian Supreme Court confirmed an essential interpretation of the fundamental requirement to bear a genuine interest in bringing legal proceedings under Sec. 100 of the Italian Code of Civil Procedure as it applies to legal actions brought by a shareholder to challenge the company's financial statements.

In particular, the Court focused on the shareholder's interest to claim for the annulment of the resolution approving the company's financial statements under Sec. 2379 of the Italian Civil Code, and confirmed that a legal action challenging the approval of the company's financial statements does not necessarily have to be grounded on expectations of more favourable economic outcomes for the reference fiscal year.  

In fact, according to the Court's reasoning, each shareholder is entitled to challenge the company's financial statements merely to enforce its right to have a true and fair view of the assets, the financial and economic conditions of the company.

As a consequence, a genuine interest in challenging the resolution which approved the company's financial statements is considered to be existing, whenever the right of the shareholder to have a true and fair view of the company from an accounting standpoint is compromised.

Given the peculiarities of the case at hand, the Court ruled that said principle applies also in case of share capital reduction for losses and in case the company is under dissolution, as in both scenarios, the shareholders keep their right to know the actual economic and financial conditions of the company and the directors and, respectively, the liquidator must continue to prepare and submit to the shareholders' meeting the financial statements in accordance with applicable laws.