Company law - A 60 years leap forward in companies organisation

Since 1 January 2004, Italy has rewritten the rules for company start up, organization and administration. This reform has brought Italian company law into line with that of other most advanced countries, introducing simplifications and greater flexibility for corporate decision-making. The new rules have replaced those in place for 60 years. Previously, government interests were at the center of company regulations, now the company itself, as a producer of wealth, plays a central role.

The key element of the reform is self-regulation, which allows companies vast powers to establish specific rules in their memorandum and articles of incorporation, without too many strict, pre-defined obligations. Other examples of flexibility can be found in the many financial tools available as well as in many corporate governance forms.

Italy has commenced profound regulatory changes even with regard to companies in crisis. The bankruptcy law reform has as its primary objective the rescue of companies in crisis (sometimes only temporarily) rather than punishment of the entrepreneur. Greater weight is therefore given to agreements with creditors and judicial intervention is more institutional, to avoid direct interference in company management.