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02 December 2019
Article 2437 of the Civil Code sets out several rules relating to shareholders' right to withdraw from a company in the event that they vote against or abstain from company resolutions which:
Further, shareholders can exercise their right of withdrawal with regard to resolutions to postpone their company's term and share limitations (eg, lock-up or pre-emption rights), subject to the articles of association.
Therefore, if a shareholder exercises their withdrawal rights, the company must compensate them financially.
A recent Court of Cassation decision (13845/2019) concerned the amendment of a company's articles of association clauses relating to dividend distribution. The amendment in question considerably increased the percentage of legal reserve (from 5% to 12%) and extraordinary statutory reserve (from 5% to 40%) before dividends were distributed in favour of shareholders. The question before the court was whether such an amendment was grounds for a shareholders' withdrawal on the basis that it was an amendment of the articles of association with regard to shareholders' voting rights or their participation.
On 22 May 2019 the Supreme Court of Cassation ruled as follows:
For further information on this topic please contact Eugenio Vaccari at Grieco e Associati by telephone (+39 06 420 3881) or email (email@example.com). The Grieco e Associati website can be accessed at www.griecoassociati.com.
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