The quotaholder’s right to information concerning the filing of the draft financial statements of the Italian limited liability company

The Court of Milan, specialized section for business matters, with its judgment of September 12, 2024, ruled that the right of a quotaholder of an Italian limited liability company (S.r.l.) to inspect the draft financial statements filed at the company’s registered office during the fifteen days preceding the quotaholders’ meeting pursuant to Article 2429, paragraph 3 of the Italian Civil Code also includes the right to be informed of such filing by appropriate and timely means.

This communication constitutes a notice effective upon receipt and must be received by the quotaholder at least fifteen days before the date scheduled for the approval of the financial statements by the quotaholders’ meeting. Otherwise, the resolution is invalid.

The case

The dispute originated from the challenge of a resolution of a quotaholders’ meeting of a limited liability company approving the financial statements for the financial year ended on October 31, 2019. The claimants, who were minority quotaholders of the company, requested to the first‑instance court to declare the resolution annulled, alleging that they had received notice of the filing of the draft financial statements at the registered office of the company – then available for inspection by the quotaholders – less than fifteen days before the date in which the quotaholders’ meeting was convened to approve the financial statements, in breach of Article 2429, paragraph 3 of the Italian Civil Code.

The defendant company argued that the claim was unfounded, as the draft financial statements had been duly filed at the registered office in due time and the disposal of Article 2429, paragraph 3 of the Italian Civil Code does not provide for any duty to inform the quotaholders that the filing is completed.

The decision

The Court of Milan, specialized section for business matters, considering that the conditions for a preliminary referral under Article 363‑bis, paragraph 1 of the Italian Code of Civil Procedure were met – in the specific case, the need to define a question not yet ruled on by the Italian Supreme Court (Corte di Cassazione), involving serious interpretative difficulties and likely to recur in numerous cases – referred the matter to the Italian Supreme Court asking for an interpretative ruling on Article 2429, paragraph 3 of the Italian Civil Code.

The Italian Supreme Court declared the preliminary referral inadmissible, finding that the requirements set out in Article 363‑bis of the Italian Code of Civil Procedure had not been met.

The Court of Milan, therefore, accepted the claimant quotaholders’ challenge and adopted an evolutionary interpretation of Article 2429, paragraph 3 of the Italian Civil Code. According to the Court, the quotaholder’s inspection right cannot be reduced to a mere formality, but rather it shall be ensured through timely communication constituting a notice effective upon receipt. The company is thus required to inform its quotaholders of the filing of the draft financial statements at the registered office by appropriate means (including, by way of example, certified e-mail, ordinary e-mail, or publication on the company’s website), in compliance with the principle of good faith.

Failure to provide such communication, or providing it late, constitutes a breach of the provision set out under Article 2429, paragraph 3 of the Italian Civil Code and results in a procedural violation capable of causing the resolution approving the financial statements to be annulled.

Applying these principles to the case at hand, the Court of Milan held that the communication sent by registered mail did not ensure prompt delivery to the quotaholders. As a result, the latter became aware of the filing of the draft financial statements only after part of the fifteen-day period had already elapsed. On these grounds, the Court annulled the quotaholders’ meeting resolution approving the financial statements.