11 August, 2017

Under Italian law, a company can carry out any kind of commercial activity; however, the company must indicate the specific activities it is going to carry out. Indeed, among the requirements of the incorporation deed of a limited liability company, the absence of which makes the deed void, one of the most important is the indication of the corporate purpose.

The corporate purpose is also relevant in the context of the relationships between the shareholders and between the latters and the directors; it is required to perform a plurality of functions: it represents the parameter to which the powers of representation of the directors are to be commended, as well as one of the essential foundations of the company – i.e. the change of the corporate purpose gives the dissident shareholder the right to withdraw from the company.

Therefore, the corporate purpose must be accurate, lawful, and possible.

Finally, here are two examples of a proper and an improper corporate purpose:

Proper

The Company, in compliance with any applicable law and, therefore, excluded any activities restricted by law, has for purpose the wholesale and retail of aromatic plants and spices.

Improper

The Company, in compliance with any applicable law and, therefore, excluded any activities restricted by law, has for purpose the general trade of goods.

(This corporate purpose is lawful and possible, but it is not accurate; it is too broad)

 

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