Russian Roulette – La clausola per le situazioni di deadlock

24 Gennaio 2019

  • Italia
  • Diritto societario

Put options on a fixed price are all clear: the Italian Supreme Court confirms the legitimacy of the repurchase agreements regarding company shares (i.e. the agreement by which the buyer undertakes to resell the shares at a later time, upon the occurrence of certain conditions, upon simple request of the seller) without any participation in the occurred losses, and admits that such cases may pass the test for the leonina societas (under Italian law a permanent and total exclusion of some partners from participation in profits and losses is prohibited).

Those who intend to invest, instead of opting for a funding, may become part of the company structure through the acquisition of a participation in the share capital and, at the same time, insure oneself a safe way out.

To avoid suffering any negative outcomes, the silent partner may, through a shareholders’ agreement, agree with the founders of the company his exit through the sale of the equity investment at a given time, under certain circumstances and at the price of purchase. Indeed, there could be room for profit too: the put option, in fact, may include interests in the agreed price of repurchase.

Focus on this new corporate instrument is recommended. It could favour numerous strategic alliances between financiers and entrepreneurs looking for capital.

The author of this article is Giovannella Condò.

The parliamentary fraction of Morena (party with majority in Congress) recently filed an initiative to reform the Federal Labor Law (FLL); this modification aims to set forth an obligation for employers to implement an action protocol to prevent gender-based discrimination and to manage violence and sexual harassment cases.

Although this type of conducts are considered in the FLL as a cause for rescission both for the employer and for the employee, with penalties for employers who incur, tolerate or allow them, around $18K pesos (US $1K) to $365K pesos (US $20K) approx., the reform aims to guarantee the existence of a mechanism to effectively protect the worker’s right to decent treatment and equality.

The Ministry of Labor and Social Welfare (MLSW) currently has a model attention protocol for workplace violence in order to promote the implementation by Mexican companies of policies and actions to detect and prevent this type of situations.

The MLSW proposes the creation of a commission incorporated by representatives of the company and the employees, with the main purposes of:

·       Implementing the aforementioned protocol;

·       Receiving, managing and solving complaints filed by employees related to workplace violence; and,

·       Imposing the corresponding penalties to the employees in the work environment, which shall be set forth in the Internal Workplace Regulations effective for the company.

In order for the protocol to be an effective mechanism to counter these types of conducts within the workplace, it is recommended that such protocol sets forth, at least the following:

·       Diagnostic processes allowing to determine the risk level of the company to determine the most appropriate preventive measures.

·       Awareness and training actions promoting violence free workplaces, allowing workers to clearly identify if they are victims of such types of conducts, the instances to which they can resort and the steps to file a complaint.

·       Mechanisms available for the workers to report these type of incidents.

·       Processes to investigate the reported incidents.

·       Guidelines to determine the penalties applicable to the workers incurring in such types of conducts.

Considering the approval of such reform is imminent and in order to guarantee compliance to it at the date of its publication and effectiveness, it is convenient that companies initiate the implementation of their compliance systems to prevent any penalty that may arise from an inspection visit of the MLSW.

It is worth mentioning that these systems do not only serve a compliance purpose, since them also bright forth multiple benefits for companies regarding prevention of operative, labor and legal risks.

It is known that denigrating practices in the workplace are one of the common causes of absenteeism, staff turnover and drop in performance. These situations have negative economic impact in companies, both in their costs and in their productivity.

The implementation of an effective compliance system allows ensuring a respectful behavior within the organization, creating a healthy workplace environment which helps to reduce such incidents and supports the capabilities of the human capital, enabling companies to meet their commercial and financial goals.

These systems also contribute to reduce the risks of exposure of companies to such claims on behalf of their workers, and also the contingencies and liabilities that may derive from them, whether under labor, civil or criminal law.

As I have already mentioned in my previous article, the most popular type of company set up in Poland is the Limited Liability Company (LLC). Many foreign investors choose this legal structure for its simplicity and low costs, and often – especially in the smaller ones – investors themselves wish to manage (or co-manage) the company, so they become members of the Management Board.

However, many of them do not pay due attention to legal consequences of such a decision and are not aware of the legal liability connected with this position. I am compelled to underline that many foreign clients invest in Poland in a form of an LLC being groundlessly convinced that the limited liability refers to the whole business in Poland and all the people involved in it. They think that, if something goes wrong and the business of a subsidiary fails, they can just close it, leave the debts behind and start somewhere else.

This is not the case: The members of the Management Board, indeed, could be forced to pay a high price for it. Let’s take a look at this topic.

According to the Polish company law the Management Board Members of an LLC are jointly and severally responsible for the debts of the company in case it does not satisfy its creditors.

Basically, in order to pursue a Member of the Management Board a creditor needs to sue the company first and initiate the enforcement proceedings. In case the enforcement proceedings turn out to be totally or partly ineffective for the lack of the company’s assets – this fact will be confirmed by the bailiff. On this basis the creditor is entitled to sue the member of the Management Board and demand all the amounts that the company didn’t pay to him/her as well as the interest and costs of the court proceedings, including the attorney’s fees. As you may imagine, the amount at stake is high.

How can a Member of the Management Board defend from the liability for the company’s debts? By proving one of the following:

  1. he/she filed for company’s bankruptcy in a due time;
  2. the court declared the restructuring proceedings towards the company in a due time,
  3. it is not his/her fault the non-filing for the bankruptcy or restructuring proceedings in a due time;
  4. the creditor did not incur damage due to the fact that the aforementioned procedures were not initiated in a due time.

The burden of proof shall lie with the Manager. In other words, if he/she needs to prove at least one of those circumstances, while the plaintiff only needs to prove the existence of an unpaid company’s debt.

Establishing the “due time” is a crucial point. It is considered appropriate to file for bankruptcy when:

  • the company for 3 consecutive months has problems with invoices paying; or
  • the company is indebted above the value of its assets for more than 2 years; or

Often an appalling event proving that the company is in serious trouble arises when the bank refused to continue the financing or worse, terminates the loan and no other bank is wishing to provide the company with the financing. .

By contrast, the restructuring may be initiated when the company is still in a relatively good condition: through an agreement with creditors for the deferment or reduction of some payments together with the implementation of certain business improvements, the restructuring agreement may bring the company back into business. Despite the restructuring being relatively expensive, it allows to maintain the company alive, overcome difficulties and get back into the game.

When it is too late or there is no good recovery plan, the only remaining solution is the liquidation of the company within the insolvency proceedings. However, also these proceedings provoke expenses: the insolvent company needs to have resources to finance the judicial fees, the accountants, the receiver’s fees, the attorney’s fees, the employee’s salaries and all other costs during the insolvency process.

If the company does not have enough assets, the court will not even open the insolvency proceedings and if, during the proceedings a shortage of funds arises, the proceedings will be closed.

If the demand for opening of the insolvency or restructuring proceedings is filed too late, the Manager cannot release himself/herself from the liability for the debts of the company and all the damages incurred by the company’s creditors as a result of a belated opening of the insolvency proceedings. As the damage is often equivalent of the unpaid debt, the creditors have two separate legal bases to sue the Management Board Members and get back from them the money they didn’t get from the company.

In extreme cases, when the negligence of the Management Board is truly gross and the damage caused to creditors due to the belated filing for bankruptcy is very high, the court may impose on the Management Board Members a prohibition of running enterprise and holding positions in enterprises.

My advice is to accept the position of Management Board Members with extreme caution and, when the first signs of corporate difficulty arise, to react immediately and contact a lawyer expert in the matter: not only for the company’s sake, but also to protect their own assets and interest.

Il principio maggioritario, aspetto cardine nelle società di capitali, entra in crisi di fronte a quelle situazioni in cui il capitale sociale è ripartito al 50% tra due soci contrapposti. In tali ipotesi l’assunzione di deliberazioni è impossibile se non in caso di unanimità e questo, evidentemente, comporta frequenti situazioni di paralisi decisionale e gestoria.

Il dissenso insanabile tra i soci può condurre alla dissoluzione della società e, per questo, sono state trovate diverse strategie per superare l’empasse: una di queste è la c.d. “Russian Roulette Clause”.

I soci possono pattiziamente concordare che in situazioni di stallo gestionale venga attivata la clausola, la quale è diretta a far ripartire l’attività sociale attraverso una riallocazione delle partecipazioni.

Le due forze contrapposte possono prevedere che al verificarsi di determinati “trigger event”, uno dei due soci (o entrambi se così concordato) abbia il potere di determinare il valore del 50% del capitale e porre l’altro di fronte ad una scelta “secca”: acquistare la quota del socio offerente, al prezzo da lui proposto, o cedergli la propria quota al medesimo prezzo.

Dentro o fuori: chi attiva la roulette russa determina il prezzo e non sono ammessi rilanci. La determinazione unilaterale del prezzo è bilanciata e causalmente equilibrata dal rischio di perdere la propria partecipazione sociale. La scelta finale, infatti, spetta al socio che non ha determinato il prezzo.

L’autore di questo articolo è Giovannella Condò.

Con l’approvazione della legge sul Bilancio dello Stato per il 2018 (Bilancio di previsione dello Stato per l’anno finanziario 2018 e bilancio pluriennale per il triennio 2018-2020, L. 27 dicembre 2017, n. 205 pubblicata nella G.U. n. 302 del 29/12/2017) la fatturazione elettronica diventa obbligatoria a fare data dal 1° Gennaio 2019 per tutti i soggetti IVA.

Si discute tuttavia la fattibilità di tale operazione o se sia necessario posticipare l’entrata in vigore della nuova normativa.

L’obbligo di fattura elettronica vale sia nel caso in cui la cessione del bene o la prestazione di servizio è effettuata tra due operatori IVA (operazioni B2B Business to Business) sia nel caso in cui la cessione/prestazione è effettuata da un operatore IVA verso un consumatore finale (operazioni B2C Business to Consumer).

L’emissione di fatture con modalità diverse da quella elettronica sarà considerata nulla.

Sono esonerati dalle menzionate disposizioni solo i soggetti che operano in “regime di vantaggio” previsto dall’art. 27 comma 3 del Decreto Legge n. 98/11 e coloro che applicano il “regime forfettario” previsto dalla Legge n. 190/14.

Dopo una prima fase riservata solamente alla fatturazione verso la PA, diventa quindi obbligatoria la fatturazione elettronica tra imprese e verso privati.

La fatturazione elettronica prevede l’emissione di fatture strutturate secondo un linguaggio standard denominato formato XML (extensible Markup Language) firmate digitalmente da chi le emette, trasmesse tramite Sdl (Servizio di interscambio dell’Agenzia delle Entrate) e obbligatoriamente da conservare ai fini fiscali solo in digitale.

La fattura elettronica si differenzia pertanto da una fattura cartacea solo per due aspetti:

  • Va necessariamente redatta utilizzando un pc, un tablet, o uno smartphone;
  • Deve essere trasmessa elettronicamente tramite il c.d. Sistema di Interscambio (SdI) altrimenti è considerata come non emessa.

Le regole per predisporre, trasmettere, ricevere e conservare le fatture elettroniche sono definite nel provvedimento n. 89757 del 30 aprile 2018 pubblicato sul sito dell’Agenzia delle Entrate.

La fatturazione elettronica è un sistema completamente digitale di emissione e conservazione delle fatture che non necessita di supporto cartaceo e quindi permette di risparmiare tutti i costi relativi a stampa, spedizione e conservazione.

L’invio della Fattura elettronica può avvenire tramite Posta Elettronica Certificata (PEC), tramite intermediario o portali web.

Il SdI esegue dei controlli sulla fattura elettronica:

  • verifica che siano presenti almeno le informazioni minime obbligatorie previste dalla legge;
  • verifica che i valori della partita IVA del fornitore oppure il C.F. del cliente siano presenti nell’Anagrafe Tributaria;
  • verifica che sia inserito l’indirizzo telematico;
  • verifica che ci sia coerenza tra i valori dell’imponibile, dell’aliquota e dell’IVA.

Se uno dei controlli non va a buon fine il SdI “scarta” la fattura. La “ricevuta di scarto” viene trasmessa da SdI alla medesima PEC o al medesimo canale telematico (FTP – Protocollo di Trasferimento File o web service) da cui ha ricevuto la fattura elettronica.

Se i controlli vanno a buon fine, il SdI recapita la fattura elettronica all’indirizzo telematico che legge nel file della fattura e invia al soggetto che ha trasmesso il file una “ricevuta di consegna”.

Nel caso in cui la casella PEC ovvero il canale telematico FTP o Web Service dove SdI prova a recapitare il file della fattura non fossero attivi, il SdI mette comunque a disposizione il duplicato della fattura in un’area riservata e invia al soggetto che ha trasmesso il file una ricevuta di impossibilità di consegna. La fattura si considera emessa per il fornitore ma non ancora definitivamente ricevuta ai fini fiscali dal cliente.

In questo caso è conveniente avvertire il cliente attraverso altri mezzi della emissione della fattura.

Sia chi emette che chi riceve una fattura elettronica è obbligato a conservarla elettronicamente. La conservazione elettronica non è la semplice memorizzazione sul PC. Il processo di conservazione elettronica è usualmente fornito da operatori privati certificati tuttavia l’Agenzia delle Entrate mette gratuitamente a disposizione un servizio di conservazione elettronica.

In caso di inosservanza dell’obbligo di emissione della fattura elettronica trovano applicazione le sanzioni previste dall’articolo 6 del Decreto Legislativo n. 417/97 che dispongono una sanzione amministrativa compresa tra il novanta e il centottanta per cento dell’imposta relativa all’imponibile non correttamente documentato o registrato nel corso dell’esercizio.

Per le operazioni “transfrontaliere” (fattura da e verso l’estero) non sussiste l’obbligo di fattura elettronica ma occorre effettuare una trasmissione mensile dei dati all’Agenzia delle Entrate entro l’ultimo giorno del mese successivo a quello della data del documento emesso ovvero a quello della data di ricezione del documento comprovante l’operazione.

L’obbligo della fatturazione elettronica si propone di potenziare le attività di prevenzione dell’evasione fiscale. Un obbligo che tuttavia ha altri vantaggi. Attraverso le fatture emesse e trasmesse in modalità digitale infatti si riducono non soltanto gli adempimenti a carico dell’Amministrazione Finanziaria (generando risparmi di risorse pubbliche) ma anche i margini di errore nell’intero ciclo di vita delle fatture, con significativi risparmi di tempo e costi nel medio e lungo periodo per imprese e professionisti.

L’autore di questo articolo è Giovanni Izzo.

In my previous post I wrote about the provisions of Polish law on companies and partnerships related to the non-competition of managers in the limited liability companies.
With this post I will look more deeply into the subject, focusing on the shareholders.

Often investors want to enter into a joint-venture with a partner who is already active on a particular market. It produces a synergy effect and allows avoiding the expensive and time consuming development phase. In such cases, it is important to negotiate and agree on the rules which will apply to the following question: “will shareholders be allowed to set up new (or continue to manage existing) businesses that are (or could be) in competition with the company?”.

Needless to say, unfair competition is prohibited at all times and regardless of the content of the Articles of Association. The real crux of the matter is fair competition.

Polish law does not contain any explicit legal provision prohibiting the shareholder from conducting an activity that is (or may be) competitive towards the Company’s business. This is particularly surprising for German and American clients, as their jurisdictions there are rules – more or less – in this sense.

In Poland, despite the absence of any explicit legal provision, the obligation to refrain from competitive activity derives from the general loyalty that the shareholders owe to the Company. However, they are obliged to a different extent, depending on the company share held. It is consistent with common sense and equity principle that the majority shareholder – which effectively controls the company – should refrain from any competitive activity. On the contrary, the loyalty obligation which rests on a minority shareholder – which only holds a little fraction of the share capital and practically has no influence on the Company – is significantly limited: he/she should not be prohibited from investing in other businesses, even if competitive.

It is worth mentioning that Polish company law provides for a disciplinary instrument that aims to protect the Company from unfair shareholders. All remaining shareholders, who together represent more than 50% of the share capital, can jointly initiate a court proceeding against a shareholder who is acting in an unfair manner. During such proceeding the court examines the case and determines whether the shareholder was obliged to refrain from the competitive activity and, if so, whether he/she violated it. As a result of such proceeding, the court may exclude this unfair-shareholder from the Company. The downside of this solution is that the shares of the excluded unfair-shareholder must be bought back by the remaining shareholders or by a third party, at their actual value. Furthermore, the procedure is expensive and lasting: on the top of this, unless the court issues an interim injunction, the shareholder may continue his/her competitive activity, causing damages to the Company. For these reasons, in many cases this tool will be inefficient, especially if the unfair-shareholder holds a stake of a significant value.

 

As we have just seen, Polish law does not provide a clear rule related to the non-competition by the shareholders and the statutory disciplinary procedure (forced buy-out) in many cases may be inefficient.

Considering that each shareholder of an LLC – even holding only the 1% of shares – has access to all information and documents of the Company, while drafting the Articles of Association, it is crucial to consider the risk deriving from the performance of competitive activities by the shareholders of the Company itself.

The non-competition cause should contain: (i) a precise description of the activity which will be deemed competitive; (iii) its territorial application area; and (iii) its duration. With regard to this last aspect, the clause may provide that a shareholder remains bound even after the sale of his/her shares.

It is advisable to introduce a disciplinary procedure for the violation of this obligation. I suggest a forced redemption of shares, so it is the Company paying the excluded shareholder and not the remaining shareholders. The shares value of this forced redemption may be significantly lower that the market value (e.g. nominal value).

This clause should be inserted also in the Shareholders’ Agreement and it should preferably contain contractual penalties (liquidated damages) for its breach, in favour of every other shareholder.

Obviously, if a shareholder is also member of the Board of Directors, he/she will also be subject to the obligations provided for the members of the Board of Directors, even if the Article of Association does not contain a non-competition clause for shareholders.

In all M&A operations one of the issues that deserves special attention as regards its analysis, ascertainment and negotiation is the tax liabilities. Even though the parties could agree on the amount of such contingencies, to negotiate the possible guarantees that the seller should grant in order to protect the buyer from a possible claim by the tax authorities, the term during which the guarantees should be in force, and to agree on the communication mechanisms between the parties (buyer and seller) and the legal defense strategies if such claim from the tax authorities arises, requires substantial negotiation efforts.

When the acquisition operation is formalized not through the purchase of shares, but through the purchase of the assets that form a business unit, the Spanish General Tax Law (“Ley General Tributaria” or “LGT”) provides a mechanism which implies an exception to the general principle provided by article 42 of the same law. Article 42 of LGT establishes the joint liability of the purchaser of a business unit for the tax liabilities of the selling company (“tax liability derived from company’s succession”). That is, in principle, according to article 42 of the LGT “the persons or entities that continue by any mean in the ownership or exercise of economic activities (the buyers) will be jointly liable with the previous owner for the tax liabilities derived from the exercise of such economic activities incurred by such previous owner”.

However, the joint tax liability of the buyer could be limited through the application before the tax authorities of the tax certificate regulated by article 175.2 of the LGT. This certificate should be applied for by the prospective buyer, with the authorization of the present owner (the seller), and, once issued, the tax liability of the buyer becomes limited to the debts, penalties and liabilities mentioned in the certificate. If the certificate is issued without mentioning any amount, or if the tax authorities do not issue it within a three months term from the application’s date, the applicant (the buyer) will be released from any tax liability derived from company’s succession.

The tax certificate for succession purposes includes the main taxes, as Value Added Tax and Corporate Income Tax, and can include as well debts derived from the withholding taxes on employees’ payroll, which in case of companies with a big number of employees could be of an outstanding amount. However, the buyer’s joint liability for salaries, related payroll amounts and social security contributions cannot be limited by such certificate, and such liability will always be joint with the business unit seller’s liability.

The application for the tax certificate should be filed before the acquisition of the business unit is completed, even if the issuance of the certificate takes place later tan the closing date (but of course, it is wiser to not close the acquisition before having the certificate). The certificate’s validity lasts for one year, as regards periodical tax obligations (for example, Value Added Tax, Corporate Income Tax and withholding taxes on salaries) and for three months as regards non periodical tax obligations.

It is very important to apply for the right tax certificate (“certificate for succession purposes according to article 175.2 of LGT”), and to not make a mistake and apply, for example, for the certificate regarding having fulfilled all tax obligations (“certificado de estar al corriente de las obligaciones fiscales”). Case law is plenty of judgments where a buyer applied for the wrong certificate, which showed no liabilities, and later on such buyer has been sentenced to pay the tax liabilities incurred by the previous owner of the business unit.

The purpose of this post is to provide information about (i) the need of Brazilian companies for providing the Country-by-Country Reporting pursuant to the OECD Rules, Action 13 of the Base Erosion and Profit Shifting Actions (“BEPS Actions”) and (ii) the need to disclose the name of the final beneficial owner of entities with equity participation in Brazilian companies, or owners of assets in Brazil.

Country-by-Country Reporting Regulation

Normative Instruction RFB No. 1681 (“IN 1681/2016”) established the rules for the Brazilian companies to be compliant with the Country-by-Country Reporting Regulation (“CbCR”). The CbCR shall be presented annually considering the financial results of the previous fiscal year, as part of the fiscal declaration (ECF, which includes the information related to the corporate tax income return). Such declaration should be filled in accordingly with the list of mandatory information determined by IN 1681/2016 and pursuant to RFB Normative Instruction No. 1,422, of December 19, 2013.

The CbCR is the result of the BEPS Project (Base Erosion and Profit Shifting) of the OECD’s initiative, contained in Action 13 of the BEPS Actions, aiming the enhancement of transparency while taking into consideration compliance costs.

Multinational groups are obliged to deliver the CbCR if consolidated revenues for the fiscal year preceding the tax year of the declaration are equal to or greater than BRL 2.26 billion (or 750 million Euros, or if the local currency of the final controller of the group is equivalent to the mentioned amounts, as of January 31, 2015).

The Brazilian subsidiary is (or may be considered) a substitute of the final controller and, as such, bound to fulfill the CbCR in the following cases:

  • it is the final controller of the multinational group is not obliged to deliver the CbCR in its jurisdiction of residence;
  • the jurisdiction where the ultimate controller is located has signed an international agreement with Brazil, however, still not ratified by the competent authorities before the deadline for delivering the CbCR; or
  • there has been a systemic failure of the jurisdiction of residence of the final controller of the multinational group that has been notified by the Brazilian Federal Revenue Office to the resident entity for tax purposes in Brazil.

In case the Brazilian subsidiary is exempt from submitting the CbCR, it will still need to provide the identification and the jurisdiction of residence for tax purposes of its parent company.

The deadline for providing the information will be the date for completing the ECF, to expire on 30 July 2018 for the fiscal year 2017. Failure to comply will expose the Brazilian subsidiary to the payment of a penalty of BRL 1,500.00 (USD 410 or EUR 340) per month. Submission of an incomplete CbCR may subject the Brazilian subsidiary a fine of 3% over the value omitted, inaccurate or incomplete.

Need to disclose beneficial ownership and how to do it

Brazilian companies are obliged to provide information on the person authorized to represent them, on the respective chain of equity interest, until the individuals characterized as final beneficial owner.

This information shall be provided when a Non-Brazilian entity present its application to obtain the Federal Corporate Taxpayers’ Registry (“CNPJ”). If the Non-Brazilian entity already has a CNPJ, it must update the CNPJ with the beneficial owner information by 31 December 2018.

Obtaining a CNPJ is mandatory for Non-Brazilian entities that have equity participation in Brazilian companies or other assets – financial investments, real estate, airplanes, ships, among others in Brazil.

This obligation is in force by means of the Brazilian Federal Revenue Office Normative Instruction No. 1634 (“IN 1634/2016“). IN 1634/2016 contains a list of information to be provided and documents to be delivered for that purpose.

On October 25, 2017, the procedure became mandatory also for Brazilian entities after publication of the ADE COCAD (Executive Declaratory Act – Registration Management General Coordination) No. 9/2017.

Fail to comply with the procedure can result in suspension of the CNPJ. This suspension could result in inability to execute bank transactions, financial investments and obtaining loans and, ultimately, prevent the remittance of dividends to other countries or even the receipt of funds by means of a loan or capital injection from the respective parent companies abroad.

Such information is not protected under fiscal secrecy, but the public employees shall not disclose this information pursuant to functional obligation of not disclosing information unless if summoned by court order.

The requirement for presenting the information on the beneficial owner is already familiar for investors in Brazil. The Brazilian financial institutions are responsible for obtaining information of their client up until the beneficial owner, pursuant to Circular Letter No. 3.461/2009 of the Brazilian Central Bank. The information provided to financial institutions are subject to bank secrecy.

These Brazilian financial institutions are severe on the provision and updating on the foreign parent companies. It is usual for companies with foreign shareholders to receive notices and warnings of possible blocking or closing the accounts if the required documents are not presented in full.

The author of this article is Paulo Yamaguchi

La fatturazione elettronica

15 Gennaio 2019

  • Italia
  • Diritto societario

Put options on a fixed price are all clear: the Italian Supreme Court confirms the legitimacy of the repurchase agreements regarding company shares (i.e. the agreement by which the buyer undertakes to resell the shares at a later time, upon the occurrence of certain conditions, upon simple request of the seller) without any participation in the occurred losses, and admits that such cases may pass the test for the leonina societas (under Italian law a permanent and total exclusion of some partners from participation in profits and losses is prohibited).

Those who intend to invest, instead of opting for a funding, may become part of the company structure through the acquisition of a participation in the share capital and, at the same time, insure oneself a safe way out.

To avoid suffering any negative outcomes, the silent partner may, through a shareholders’ agreement, agree with the founders of the company his exit through the sale of the equity investment at a given time, under certain circumstances and at the price of purchase. Indeed, there could be room for profit too: the put option, in fact, may include interests in the agreed price of repurchase.

Focus on this new corporate instrument is recommended. It could favour numerous strategic alliances between financiers and entrepreneurs looking for capital.

The author of this article is Giovannella Condò.

The parliamentary fraction of Morena (party with majority in Congress) recently filed an initiative to reform the Federal Labor Law (FLL); this modification aims to set forth an obligation for employers to implement an action protocol to prevent gender-based discrimination and to manage violence and sexual harassment cases.

Although this type of conducts are considered in the FLL as a cause for rescission both for the employer and for the employee, with penalties for employers who incur, tolerate or allow them, around $18K pesos (US $1K) to $365K pesos (US $20K) approx., the reform aims to guarantee the existence of a mechanism to effectively protect the worker’s right to decent treatment and equality.

The Ministry of Labor and Social Welfare (MLSW) currently has a model attention protocol for workplace violence in order to promote the implementation by Mexican companies of policies and actions to detect and prevent this type of situations.

The MLSW proposes the creation of a commission incorporated by representatives of the company and the employees, with the main purposes of:

·       Implementing the aforementioned protocol;

·       Receiving, managing and solving complaints filed by employees related to workplace violence; and,

·       Imposing the corresponding penalties to the employees in the work environment, which shall be set forth in the Internal Workplace Regulations effective for the company.

In order for the protocol to be an effective mechanism to counter these types of conducts within the workplace, it is recommended that such protocol sets forth, at least the following:

·       Diagnostic processes allowing to determine the risk level of the company to determine the most appropriate preventive measures.

·       Awareness and training actions promoting violence free workplaces, allowing workers to clearly identify if they are victims of such types of conducts, the instances to which they can resort and the steps to file a complaint.

·       Mechanisms available for the workers to report these type of incidents.

·       Processes to investigate the reported incidents.

·       Guidelines to determine the penalties applicable to the workers incurring in such types of conducts.

Considering the approval of such reform is imminent and in order to guarantee compliance to it at the date of its publication and effectiveness, it is convenient that companies initiate the implementation of their compliance systems to prevent any penalty that may arise from an inspection visit of the MLSW.

It is worth mentioning that these systems do not only serve a compliance purpose, since them also bright forth multiple benefits for companies regarding prevention of operative, labor and legal risks.

It is known that denigrating practices in the workplace are one of the common causes of absenteeism, staff turnover and drop in performance. These situations have negative economic impact in companies, both in their costs and in their productivity.

The implementation of an effective compliance system allows ensuring a respectful behavior within the organization, creating a healthy workplace environment which helps to reduce such incidents and supports the capabilities of the human capital, enabling companies to meet their commercial and financial goals.

These systems also contribute to reduce the risks of exposure of companies to such claims on behalf of their workers, and also the contingencies and liabilities that may derive from them, whether under labor, civil or criminal law.

As I have already mentioned in my previous article, the most popular type of company set up in Poland is the Limited Liability Company (LLC). Many foreign investors choose this legal structure for its simplicity and low costs, and often – especially in the smaller ones – investors themselves wish to manage (or co-manage) the company, so they become members of the Management Board.

However, many of them do not pay due attention to legal consequences of such a decision and are not aware of the legal liability connected with this position. I am compelled to underline that many foreign clients invest in Poland in a form of an LLC being groundlessly convinced that the limited liability refers to the whole business in Poland and all the people involved in it. They think that, if something goes wrong and the business of a subsidiary fails, they can just close it, leave the debts behind and start somewhere else.

This is not the case: The members of the Management Board, indeed, could be forced to pay a high price for it. Let’s take a look at this topic.

According to the Polish company law the Management Board Members of an LLC are jointly and severally responsible for the debts of the company in case it does not satisfy its creditors.

Basically, in order to pursue a Member of the Management Board a creditor needs to sue the company first and initiate the enforcement proceedings. In case the enforcement proceedings turn out to be totally or partly ineffective for the lack of the company’s assets – this fact will be confirmed by the bailiff. On this basis the creditor is entitled to sue the member of the Management Board and demand all the amounts that the company didn’t pay to him/her as well as the interest and costs of the court proceedings, including the attorney’s fees. As you may imagine, the amount at stake is high.

How can a Member of the Management Board defend from the liability for the company’s debts? By proving one of the following:

  1. he/she filed for company’s bankruptcy in a due time;
  2. the court declared the restructuring proceedings towards the company in a due time,
  3. it is not his/her fault the non-filing for the bankruptcy or restructuring proceedings in a due time;
  4. the creditor did not incur damage due to the fact that the aforementioned procedures were not initiated in a due time.

The burden of proof shall lie with the Manager. In other words, if he/she needs to prove at least one of those circumstances, while the plaintiff only needs to prove the existence of an unpaid company’s debt.

Establishing the “due time” is a crucial point. It is considered appropriate to file for bankruptcy when:

  • the company for 3 consecutive months has problems with invoices paying; or
  • the company is indebted above the value of its assets for more than 2 years; or

Often an appalling event proving that the company is in serious trouble arises when the bank refused to continue the financing or worse, terminates the loan and no other bank is wishing to provide the company with the financing. .

By contrast, the restructuring may be initiated when the company is still in a relatively good condition: through an agreement with creditors for the deferment or reduction of some payments together with the implementation of certain business improvements, the restructuring agreement may bring the company back into business. Despite the restructuring being relatively expensive, it allows to maintain the company alive, overcome difficulties and get back into the game.

When it is too late or there is no good recovery plan, the only remaining solution is the liquidation of the company within the insolvency proceedings. However, also these proceedings provoke expenses: the insolvent company needs to have resources to finance the judicial fees, the accountants, the receiver’s fees, the attorney’s fees, the employee’s salaries and all other costs during the insolvency process.

If the company does not have enough assets, the court will not even open the insolvency proceedings and if, during the proceedings a shortage of funds arises, the proceedings will be closed.

If the demand for opening of the insolvency or restructuring proceedings is filed too late, the Manager cannot release himself/herself from the liability for the debts of the company and all the damages incurred by the company’s creditors as a result of a belated opening of the insolvency proceedings. As the damage is often equivalent of the unpaid debt, the creditors have two separate legal bases to sue the Management Board Members and get back from them the money they didn’t get from the company.

In extreme cases, when the negligence of the Management Board is truly gross and the damage caused to creditors due to the belated filing for bankruptcy is very high, the court may impose on the Management Board Members a prohibition of running enterprise and holding positions in enterprises.

My advice is to accept the position of Management Board Members with extreme caution and, when the first signs of corporate difficulty arise, to react immediately and contact a lawyer expert in the matter: not only for the company’s sake, but also to protect their own assets and interest.

Il principio maggioritario, aspetto cardine nelle società di capitali, entra in crisi di fronte a quelle situazioni in cui il capitale sociale è ripartito al 50% tra due soci contrapposti. In tali ipotesi l’assunzione di deliberazioni è impossibile se non in caso di unanimità e questo, evidentemente, comporta frequenti situazioni di paralisi decisionale e gestoria.

Il dissenso insanabile tra i soci può condurre alla dissoluzione della società e, per questo, sono state trovate diverse strategie per superare l’empasse: una di queste è la c.d. “Russian Roulette Clause”.

I soci possono pattiziamente concordare che in situazioni di stallo gestionale venga attivata la clausola, la quale è diretta a far ripartire l’attività sociale attraverso una riallocazione delle partecipazioni.

Le due forze contrapposte possono prevedere che al verificarsi di determinati “trigger event”, uno dei due soci (o entrambi se così concordato) abbia il potere di determinare il valore del 50% del capitale e porre l’altro di fronte ad una scelta “secca”: acquistare la quota del socio offerente, al prezzo da lui proposto, o cedergli la propria quota al medesimo prezzo.

Dentro o fuori: chi attiva la roulette russa determina il prezzo e non sono ammessi rilanci. La determinazione unilaterale del prezzo è bilanciata e causalmente equilibrata dal rischio di perdere la propria partecipazione sociale. La scelta finale, infatti, spetta al socio che non ha determinato il prezzo.

L’autore di questo articolo è Giovannella Condò.

Con l’approvazione della legge sul Bilancio dello Stato per il 2018 (Bilancio di previsione dello Stato per l’anno finanziario 2018 e bilancio pluriennale per il triennio 2018-2020, L. 27 dicembre 2017, n. 205 pubblicata nella G.U. n. 302 del 29/12/2017) la fatturazione elettronica diventa obbligatoria a fare data dal 1° Gennaio 2019 per tutti i soggetti IVA.

Si discute tuttavia la fattibilità di tale operazione o se sia necessario posticipare l’entrata in vigore della nuova normativa.

L’obbligo di fattura elettronica vale sia nel caso in cui la cessione del bene o la prestazione di servizio è effettuata tra due operatori IVA (operazioni B2B Business to Business) sia nel caso in cui la cessione/prestazione è effettuata da un operatore IVA verso un consumatore finale (operazioni B2C Business to Consumer).

L’emissione di fatture con modalità diverse da quella elettronica sarà considerata nulla.

Sono esonerati dalle menzionate disposizioni solo i soggetti che operano in “regime di vantaggio” previsto dall’art. 27 comma 3 del Decreto Legge n. 98/11 e coloro che applicano il “regime forfettario” previsto dalla Legge n. 190/14.

Dopo una prima fase riservata solamente alla fatturazione verso la PA, diventa quindi obbligatoria la fatturazione elettronica tra imprese e verso privati.

La fatturazione elettronica prevede l’emissione di fatture strutturate secondo un linguaggio standard denominato formato XML (extensible Markup Language) firmate digitalmente da chi le emette, trasmesse tramite Sdl (Servizio di interscambio dell’Agenzia delle Entrate) e obbligatoriamente da conservare ai fini fiscali solo in digitale.

La fattura elettronica si differenzia pertanto da una fattura cartacea solo per due aspetti:

  • Va necessariamente redatta utilizzando un pc, un tablet, o uno smartphone;
  • Deve essere trasmessa elettronicamente tramite il c.d. Sistema di Interscambio (SdI) altrimenti è considerata come non emessa.

Le regole per predisporre, trasmettere, ricevere e conservare le fatture elettroniche sono definite nel provvedimento n. 89757 del 30 aprile 2018 pubblicato sul sito dell’Agenzia delle Entrate.

La fatturazione elettronica è un sistema completamente digitale di emissione e conservazione delle fatture che non necessita di supporto cartaceo e quindi permette di risparmiare tutti i costi relativi a stampa, spedizione e conservazione.

L’invio della Fattura elettronica può avvenire tramite Posta Elettronica Certificata (PEC), tramite intermediario o portali web.

Il SdI esegue dei controlli sulla fattura elettronica:

  • verifica che siano presenti almeno le informazioni minime obbligatorie previste dalla legge;
  • verifica che i valori della partita IVA del fornitore oppure il C.F. del cliente siano presenti nell’Anagrafe Tributaria;
  • verifica che sia inserito l’indirizzo telematico;
  • verifica che ci sia coerenza tra i valori dell’imponibile, dell’aliquota e dell’IVA.

Se uno dei controlli non va a buon fine il SdI “scarta” la fattura. La “ricevuta di scarto” viene trasmessa da SdI alla medesima PEC o al medesimo canale telematico (FTP – Protocollo di Trasferimento File o web service) da cui ha ricevuto la fattura elettronica.

Se i controlli vanno a buon fine, il SdI recapita la fattura elettronica all’indirizzo telematico che legge nel file della fattura e invia al soggetto che ha trasmesso il file una “ricevuta di consegna”.

Nel caso in cui la casella PEC ovvero il canale telematico FTP o Web Service dove SdI prova a recapitare il file della fattura non fossero attivi, il SdI mette comunque a disposizione il duplicato della fattura in un’area riservata e invia al soggetto che ha trasmesso il file una ricevuta di impossibilità di consegna. La fattura si considera emessa per il fornitore ma non ancora definitivamente ricevuta ai fini fiscali dal cliente.

In questo caso è conveniente avvertire il cliente attraverso altri mezzi della emissione della fattura.

Sia chi emette che chi riceve una fattura elettronica è obbligato a conservarla elettronicamente. La conservazione elettronica non è la semplice memorizzazione sul PC. Il processo di conservazione elettronica è usualmente fornito da operatori privati certificati tuttavia l’Agenzia delle Entrate mette gratuitamente a disposizione un servizio di conservazione elettronica.

In caso di inosservanza dell’obbligo di emissione della fattura elettronica trovano applicazione le sanzioni previste dall’articolo 6 del Decreto Legislativo n. 417/97 che dispongono una sanzione amministrativa compresa tra il novanta e il centottanta per cento dell’imposta relativa all’imponibile non correttamente documentato o registrato nel corso dell’esercizio.

Per le operazioni “transfrontaliere” (fattura da e verso l’estero) non sussiste l’obbligo di fattura elettronica ma occorre effettuare una trasmissione mensile dei dati all’Agenzia delle Entrate entro l’ultimo giorno del mese successivo a quello della data del documento emesso ovvero a quello della data di ricezione del documento comprovante l’operazione.

L’obbligo della fatturazione elettronica si propone di potenziare le attività di prevenzione dell’evasione fiscale. Un obbligo che tuttavia ha altri vantaggi. Attraverso le fatture emesse e trasmesse in modalità digitale infatti si riducono non soltanto gli adempimenti a carico dell’Amministrazione Finanziaria (generando risparmi di risorse pubbliche) ma anche i margini di errore nell’intero ciclo di vita delle fatture, con significativi risparmi di tempo e costi nel medio e lungo periodo per imprese e professionisti.

L’autore di questo articolo è Giovanni Izzo.

In my previous post I wrote about the provisions of Polish law on companies and partnerships related to the non-competition of managers in the limited liability companies.
With this post I will look more deeply into the subject, focusing on the shareholders.

Often investors want to enter into a joint-venture with a partner who is already active on a particular market. It produces a synergy effect and allows avoiding the expensive and time consuming development phase. In such cases, it is important to negotiate and agree on the rules which will apply to the following question: “will shareholders be allowed to set up new (or continue to manage existing) businesses that are (or could be) in competition with the company?”.

Needless to say, unfair competition is prohibited at all times and regardless of the content of the Articles of Association. The real crux of the matter is fair competition.

Polish law does not contain any explicit legal provision prohibiting the shareholder from conducting an activity that is (or may be) competitive towards the Company’s business. This is particularly surprising for German and American clients, as their jurisdictions there are rules – more or less – in this sense.

In Poland, despite the absence of any explicit legal provision, the obligation to refrain from competitive activity derives from the general loyalty that the shareholders owe to the Company. However, they are obliged to a different extent, depending on the company share held. It is consistent with common sense and equity principle that the majority shareholder – which effectively controls the company – should refrain from any competitive activity. On the contrary, the loyalty obligation which rests on a minority shareholder – which only holds a little fraction of the share capital and practically has no influence on the Company – is significantly limited: he/she should not be prohibited from investing in other businesses, even if competitive.

It is worth mentioning that Polish company law provides for a disciplinary instrument that aims to protect the Company from unfair shareholders. All remaining shareholders, who together represent more than 50% of the share capital, can jointly initiate a court proceeding against a shareholder who is acting in an unfair manner. During such proceeding the court examines the case and determines whether the shareholder was obliged to refrain from the competitive activity and, if so, whether he/she violated it. As a result of such proceeding, the court may exclude this unfair-shareholder from the Company. The downside of this solution is that the shares of the excluded unfair-shareholder must be bought back by the remaining shareholders or by a third party, at their actual value. Furthermore, the procedure is expensive and lasting: on the top of this, unless the court issues an interim injunction, the shareholder may continue his/her competitive activity, causing damages to the Company. For these reasons, in many cases this tool will be inefficient, especially if the unfair-shareholder holds a stake of a significant value.

 

As we have just seen, Polish law does not provide a clear rule related to the non-competition by the shareholders and the statutory disciplinary procedure (forced buy-out) in many cases may be inefficient.

Considering that each shareholder of an LLC – even holding only the 1% of shares – has access to all information and documents of the Company, while drafting the Articles of Association, it is crucial to consider the risk deriving from the performance of competitive activities by the shareholders of the Company itself.

The non-competition cause should contain: (i) a precise description of the activity which will be deemed competitive; (iii) its territorial application area; and (iii) its duration. With regard to this last aspect, the clause may provide that a shareholder remains bound even after the sale of his/her shares.

It is advisable to introduce a disciplinary procedure for the violation of this obligation. I suggest a forced redemption of shares, so it is the Company paying the excluded shareholder and not the remaining shareholders. The shares value of this forced redemption may be significantly lower that the market value (e.g. nominal value).

This clause should be inserted also in the Shareholders’ Agreement and it should preferably contain contractual penalties (liquidated damages) for its breach, in favour of every other shareholder.

Obviously, if a shareholder is also member of the Board of Directors, he/she will also be subject to the obligations provided for the members of the Board of Directors, even if the Article of Association does not contain a non-competition clause for shareholders.

In all M&A operations one of the issues that deserves special attention as regards its analysis, ascertainment and negotiation is the tax liabilities. Even though the parties could agree on the amount of such contingencies, to negotiate the possible guarantees that the seller should grant in order to protect the buyer from a possible claim by the tax authorities, the term during which the guarantees should be in force, and to agree on the communication mechanisms between the parties (buyer and seller) and the legal defense strategies if such claim from the tax authorities arises, requires substantial negotiation efforts.

When the acquisition operation is formalized not through the purchase of shares, but through the purchase of the assets that form a business unit, the Spanish General Tax Law (“Ley General Tributaria” or “LGT”) provides a mechanism which implies an exception to the general principle provided by article 42 of the same law. Article 42 of LGT establishes the joint liability of the purchaser of a business unit for the tax liabilities of the selling company (“tax liability derived from company’s succession”). That is, in principle, according to article 42 of the LGT “the persons or entities that continue by any mean in the ownership or exercise of economic activities (the buyers) will be jointly liable with the previous owner for the tax liabilities derived from the exercise of such economic activities incurred by such previous owner”.

However, the joint tax liability of the buyer could be limited through the application before the tax authorities of the tax certificate regulated by article 175.2 of the LGT. This certificate should be applied for by the prospective buyer, with the authorization of the present owner (the seller), and, once issued, the tax liability of the buyer becomes limited to the debts, penalties and liabilities mentioned in the certificate. If the certificate is issued without mentioning any amount, or if the tax authorities do not issue it within a three months term from the application’s date, the applicant (the buyer) will be released from any tax liability derived from company’s succession.

The tax certificate for succession purposes includes the main taxes, as Value Added Tax and Corporate Income Tax, and can include as well debts derived from the withholding taxes on employees’ payroll, which in case of companies with a big number of employees could be of an outstanding amount. However, the buyer’s joint liability for salaries, related payroll amounts and social security contributions cannot be limited by such certificate, and such liability will always be joint with the business unit seller’s liability.

The application for the tax certificate should be filed before the acquisition of the business unit is completed, even if the issuance of the certificate takes place later tan the closing date (but of course, it is wiser to not close the acquisition before having the certificate). The certificate’s validity lasts for one year, as regards periodical tax obligations (for example, Value Added Tax, Corporate Income Tax and withholding taxes on salaries) and for three months as regards non periodical tax obligations.

It is very important to apply for the right tax certificate (“certificate for succession purposes according to article 175.2 of LGT”), and to not make a mistake and apply, for example, for the certificate regarding having fulfilled all tax obligations (“certificado de estar al corriente de las obligaciones fiscales”). Case law is plenty of judgments where a buyer applied for the wrong certificate, which showed no liabilities, and later on such buyer has been sentenced to pay the tax liabilities incurred by the previous owner of the business unit.

The purpose of this post is to provide information about (i) the need of Brazilian companies for providing the Country-by-Country Reporting pursuant to the OECD Rules, Action 13 of the Base Erosion and Profit Shifting Actions (“BEPS Actions”) and (ii) the need to disclose the name of the final beneficial owner of entities with equity participation in Brazilian companies, or owners of assets in Brazil.

Country-by-Country Reporting Regulation

Normative Instruction RFB No. 1681 (“IN 1681/2016”) established the rules for the Brazilian companies to be compliant with the Country-by-Country Reporting Regulation (“CbCR”). The CbCR shall be presented annually considering the financial results of the previous fiscal year, as part of the fiscal declaration (ECF, which includes the information related to the corporate tax income return). Such declaration should be filled in accordingly with the list of mandatory information determined by IN 1681/2016 and pursuant to RFB Normative Instruction No. 1,422, of December 19, 2013.

The CbCR is the result of the BEPS Project (Base Erosion and Profit Shifting) of the OECD’s initiative, contained in Action 13 of the BEPS Actions, aiming the enhancement of transparency while taking into consideration compliance costs.

Multinational groups are obliged to deliver the CbCR if consolidated revenues for the fiscal year preceding the tax year of the declaration are equal to or greater than BRL 2.26 billion (or 750 million Euros, or if the local currency of the final controller of the group is equivalent to the mentioned amounts, as of January 31, 2015).

The Brazilian subsidiary is (or may be considered) a substitute of the final controller and, as such, bound to fulfill the CbCR in the following cases:

  • it is the final controller of the multinational group is not obliged to deliver the CbCR in its jurisdiction of residence;
  • the jurisdiction where the ultimate controller is located has signed an international agreement with Brazil, however, still not ratified by the competent authorities before the deadline for delivering the CbCR; or
  • there has been a systemic failure of the jurisdiction of residence of the final controller of the multinational group that has been notified by the Brazilian Federal Revenue Office to the resident entity for tax purposes in Brazil.

In case the Brazilian subsidiary is exempt from submitting the CbCR, it will still need to provide the identification and the jurisdiction of residence for tax purposes of its parent company.

The deadline for providing the information will be the date for completing the ECF, to expire on 30 July 2018 for the fiscal year 2017. Failure to comply will expose the Brazilian subsidiary to the payment of a penalty of BRL 1,500.00 (USD 410 or EUR 340) per month. Submission of an incomplete CbCR may subject the Brazilian subsidiary a fine of 3% over the value omitted, inaccurate or incomplete.

Need to disclose beneficial ownership and how to do it

Brazilian companies are obliged to provide information on the person authorized to represent them, on the respective chain of equity interest, until the individuals characterized as final beneficial owner.

This information shall be provided when a Non-Brazilian entity present its application to obtain the Federal Corporate Taxpayers’ Registry (“CNPJ”). If the Non-Brazilian entity already has a CNPJ, it must update the CNPJ with the beneficial owner information by 31 December 2018.

Obtaining a CNPJ is mandatory for Non-Brazilian entities that have equity participation in Brazilian companies or other assets – financial investments, real estate, airplanes, ships, among others in Brazil.

This obligation is in force by means of the Brazilian Federal Revenue Office Normative Instruction No. 1634 (“IN 1634/2016“). IN 1634/2016 contains a list of information to be provided and documents to be delivered for that purpose.

On October 25, 2017, the procedure became mandatory also for Brazilian entities after publication of the ADE COCAD (Executive Declaratory Act – Registration Management General Coordination) No. 9/2017.

Fail to comply with the procedure can result in suspension of the CNPJ. This suspension could result in inability to execute bank transactions, financial investments and obtaining loans and, ultimately, prevent the remittance of dividends to other countries or even the receipt of funds by means of a loan or capital injection from the respective parent companies abroad.

Such information is not protected under fiscal secrecy, but the public employees shall not disclose this information pursuant to functional obligation of not disclosing information unless if summoned by court order.

The requirement for presenting the information on the beneficial owner is already familiar for investors in Brazil. The Brazilian financial institutions are responsible for obtaining information of their client up until the beneficial owner, pursuant to Circular Letter No. 3.461/2009 of the Brazilian Central Bank. The information provided to financial institutions are subject to bank secrecy.

These Brazilian financial institutions are severe on the provision and updating on the foreign parent companies. It is usual for companies with foreign shareholders to receive notices and warnings of possible blocking or closing the accounts if the required documents are not presented in full.

The author of this article is Paulo Yamaguchi