[ESTABLISHING A BUSINESS ENTITY IN ITALY] 273
Furthermore, the legislator, with a view to guaranteeing functionality and internal stability, and the solvency of the Simple Investment Company (SIS); prescribes: (i) The mandatory conclusion of insurance policy on professional civil liability appropriate to the risks related to the activity conducted. (ii) That the SIS has an adequate system of governance and control to ensure the safe and prudent management and compliance with the provisions provided. Thanks to the requirements the SISs must have, they present themselves as a particularly lean investment vehicle with less operational complexity and for this reason, take advantage of some simplification compared to the rest of the companies whose activity consists of raising financial capital. In fact, the Growth Decree establishes that the implementing provisions under article 6, paragraphs 1, 2 and 2-bis of the TUF, which contain a series of restrictive and binding obligations in terms of transparency, publicity and controls by the supervisory bodies (Bank of Italy and CONSOB), do not apply to SIS. This means that an important part of the second legislation issued by the Bank of Italy and the CONSOB, to which the Investment Companies are normally subjected, will not be applied to the SISs, with the consequence that their activity and their management will be simplified. There is further simplification regarding requirements pertaining to the subjects who participate in a SIS. In fact, this subject, pursuant to the new art. 35 undecies TUF, must possess exclusively the requisites prescribed by art. 14, with the exclusion of
the
requirements
to
demonstrate
competence in the financial industry. Finally, the legislator provided one more limitation to the SISs. Subjects that control a SIS directly or indirectly through subsidiaries or parent companies or are subject to common control also by virtue of shareholders' agreements or contractual obligations pursuant to Article 2359 of the Italian Civil Code, may constitute a new SIS only within the overall limit of twenty-five million Euros. A similar limit is also set for subjects who perform administrative, managerial and control functions in one or more SIS. The above has been established because, in the opinion of experts, this new type of company could favor concealing large investment projects, which with the new legal entity would be fragmented through the "serial" establishment of SISs. 3.2 Groups of Companies Since the reform of the Company law approved by Legislative Decree January 17, 2003, n.6, (“Reform”), the Italian legal system now regulates certain aspects connected to the customary practice of organizing business activities through the establishment of groups of companies. While the law does not directly define the term “group of companies,” it refers to the concept of “activity of direction and co - ordination of companies,” of “coordinating company” (i.e., the mother company) and of “coordinated company” (i.e., the controlled company or subsidiary). Furthermore, the law does not indicate or list the actual cases in which the activity of direction and coordination of companies is deemed to exist, but it establishes only a few general rebuttable presumptions of its existence. More precisely, the activity of coordination
ILN Corporate Group – Establishing a Business Entity Series
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