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monistic system such control is not qualified as a duty of the audit committee, and it shall be exercised by an external auditor. It is worth mentioning that, in case of adoption of the monistic system, at least half of the members of the board of directors must meet the independence requirements provided for statutory auditors by the Italian Civil Code or by the codes of conduct issued by trade associations or by the relevant market management companies. 5.1.2 S.r.l. and S.r.l.s. The articles of association can establish the precise limits of the competence of each corporate body, with significant difference from company to company. More precisely, the quota holders shall resolve any matter referred to them by the law or by the articles of association, including on any matter referred to them by the administrative body or by part of the quotaholders. The matters reserved by the law to the exclusive decision of the quota holders are: (i) the yearly approval of the financial statements and the related decision on profits/losses; (ii) the appointment and revocation of the members of the administrative body; and (iii) the amendments of the articles of association (for which a quotaholders’ meeting before a notary public is mandatory). The voting right in S.r.l. and S.r.l.s. is attributed to each member in proportion to their participation in the company. Such general rule may be derogated by the Bylaws, which may attribute to certain quotaholders an increase of their voting rights (e.g., multiple vote, casting vote), or a
limitation to the same (i.e., limited or conditional vote). The administrative body is the competent body for the ordinary and extraordinary management of the company and can be made of (i) a single director, (ii) a plurality of directors, with managing powers that can be exercised either jointly, severally, or both, or alternatively (iii) of a board of directors. No restrictions to the duration and renewal of the office of directors are provided by law. Furthermore, the S.r.l. structure grants flexibility also regarding the appointment of the controlling body. The appointment of, alternatively, a single statutory auditor, a board of statutory auditors, or of an external auditor is not mandatory, unless: (A) the company must consolidate its financial statements; (B) the company controls a company obligated to external audit control; (C) the company exceeds, for two subsequent financial years, at least two of the following minimum financial thresholds: (i) the total assets in the assets and liabilities statement exceed Euro 4.400.000; (ii) the total earnings from sales of goods and services exceed Euro 8.800.000; (iii) the average human resource employed during each financial year exceeds 50 units. 5.2 Requirements for local shareholding/directors As a preliminary remark, it should be noted that no restriction and/or limitation exists in Italy on foreign investment including equity ownership of Italian companies by foreign investors and business operators. The same applies to foreign directors.
ILN Corporate Group – Establishing a Business Entity Series
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