ANDREA FUSARO Transferring Business Ownership in Italian ...

sell the shares, or settling disputes among the heirs who take active part in the business and disturb
the balance.
Companions cannot only rely on a family agreement or a will, since the member can amend it or
withdraw.To strengthen their position, they can insert transfer restrictions in the article of association
or make shareholders' agreements which hamper the possibilities for heirs to acquire shares 9 .
Italian law allows company transfer restrictions to be included in the articles , clauses generally
used to protect ownership in small and medium family-owned entreprises.
A recent article describes four main types 10 . Two are in no way related to inheritance 11 . Other
clauses work with inheritance. Prohibitive clause forbids all transfer of ownership, for a certain period;
it covers sales and gifts, even inheritance, on condition that the heir receives compensation.
Post- sale purchase right provides the same rule of "first refusal", but after a person has acquired
shares, giving the other shareholders an option to buy the shares, for a price settled according to
stipulations or determined after negotiations. Further types of transfer restrictions are buy-sell
clauses, mandatory for the heirs or for other shareholders. In the first case, other shareholders are
obliged to buy the shares of the deceased, if the heirs want to sell. To protect ownership, the opposite
is better suited , i.e. the clause according to which the heirs are obliged to sell if other shareholders
want to buy. This clause is common in Italy, even in the articles of association, providing
mechanisms to determine the price.
The problem is that the heirs must be compensated, and this often happens through drainage of
capital from the company, such as in the case of withdrawal; sometimes the partnership is dissolved
and the business ceases.
Some tools are used to plan successions and counteract drawbacks.
3. Like everywhere else - quoting Roland Krause- "family entrepreneurs face an unavoidable succession
dilemma: they must make strategic decisions about transitioning ownership of the family
business. The main alternatives are to sell the company to someone outside the family or to make
arrangements for an interfamily succession. In the latter case, there are many transition modes, e.g.,
through a gift of shares, a will....". In Germany even a "mixed marriage/succession contract" is
available, but in Italy succession agreements are prohibited. It fits that "the choice of succession
mode is the outcome of an interaction process between generations, with civil and tax laws determining
the transactions costs of the different succession alternatives", and that "although succession
problems are universal, transition methods adopted vary around the world as each country has its
own tax system" 12 .
The tools have been divided between those devoted to careful succession planning and emergency
measures.
4. Among emergency measures one finds the power of attorney post mortem, acknowledged before
a public notary, that does not cease upon death of principal. This effect in Germany is stated by par.
9
L.-G. SUND, H.RUNHEDE, K.HAAG, Divorce and death in the Family Firm- A Business Law Perspective, quoted
above
10
L.-G. SUND, P.-O. BJUGGREN, Protection of Ownership in Family Firms. The Owner and management Perspective,
paper delivered at 1 st Bangkok International Forum on Indigenous Management Practice(BIFIM). 8-12 December
2008, Kaesesart University, Bangkok, Thailand
11
Consent clause according which" a shareholder who wishes to transfer his or her shares or a part of them, is obliged
to ask for permission from the other shareholders, the board or the annual meeting"; where the answer is negative, "the
shareholder may be entitled to require the board to appoint another buyer or make an appeal". Right of first refusal obligates
the shareholder, who intends to transfer the shares to inform other shareholders, or the board which will inform
them. The others have an option to purchase the shares, for a price determined in the clause or negotiated.
12 th
"Planning Succesion in International Family Business-Recent Developments in Germany", paper for the 13 World
Conference of the International Society of Family Law. Vienna 16 – 20 September 2008; Section: Finances and Freedom
of Testation- Legitimate portion- Protection of surviving spouses and children
2