Investment in Italy

Investment in Italy3.1.2.2 Limited liability company (Srl)A limited liability company is suitable for companies with few quotaholders (even a solequotaholder) and slim management structures. The corporate capital is divided into asmany quotas as the number of quotaholders; the quotas, unless indicated otherwise in thecompany’s articles of association, are freely transferable by inter vivos and mortis causaacts. The rights, both administrative and economic, belong to quotaholders proportionally tothe size of their interests in the company, unless the articles of association allow individualquotaholders special rights relating to the management of the company or the distributionof profits, in accordance with article 2468 of the Italian Civil Code.If expressly provided for by the company’s articles of association, capital contributions mayalso be made in kind. Unlike contributions to the capital of stock companies, those to Srlscan also consist of services supplied by the quotaholder.The articles of association can allow the company to issue securities (titoli di debito),establishing the applicable limits, procedures and majorities necessary for the adoption ofthe relevant resolution. These securities can be underwritten only by financial institutionsand there are limits on their circulation.Article 2475 of the Italian Civil Code establishes that, unless otherwise provided for in thecompany’s articles of association, the management of a limited liability company mustbe entrusted to one or more quotaholders. Those quotaholders that are not involved inthe management of the company are entitled to receive information from the directorsand to consult and inspect, also through trusted professionals, the company’s books andmanagement documentation, and thus to monitor the directors’ activities.Pursuant to article 2477 of the Italian Civil Code, a limited liability company is not required toappoint a board of statutory auditors, unless:• the corporate capital of the company exceeds the minimum established for stockcompanies (EUR 120,000.00);• expressly required by the company’s articles of association;• for two consecutive financial years certain levels are exceeded (total assets, sales,average number of employees).Notwithstanding the above, when a limited liability company is required to appoint a board ofstatutory auditors, they are entrusted not only with the function of supervising compliancewith the law and the articles of association, as provided for by article 2403 of the Italian CivilCode, but also with the task of auditing the accounts, unless specified otherwise by thearticles of association.26© 2012 KPMG S.p.A., KPMG Advisory S.p.A., KPMG Fides Servizi di Amministrazione S.p.A., KPMG Audit S.p.A., Italian limited liability share capital companies, and Studio Associato Consulenza legale e tributaria, anItalian professional partnership, are member firms of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.