US and Italian Corporate Law: Faraway, so Close (Diritto societario statunitense e diritto societario italiano: In weiter Ferne, so nah)
Giurisprudenza Commerciale, Part I, pp. 274-287, 2007
14 Pages Posted: 17 Sep 2007 Last revised: 13 Nov 2007
US and Italian corporate laws couldn't be more different one from the other. In the US, corporate law is enabling; in Italy mandatory terms in corporate law provisions are still pervasive; in the US, corporate law concentrates on relationships between shareholders and managers and between minority and majority shareholders; in Italy, many corporate law rules are in place also to protect creditors. In the US, (Delaware) courts play a central role in policing proper corporate behavior by enforcing open-ended standards (e.g. fairness); Italian courts seldom are involved in corporate governance issues and tend to defer to insiders' decisions. In the US, regulatory competition has been a reality for more than a century; in Italy, eight years after Centros, virtually all businesses still incorporate in Italy instead of shopping for other (European) jurisdictions. After developing some reflections upon these differences between the two systems, and especially upon the still inflexible nature of Italian law, this article raises the question of whether there are institutional or cultural features in Italy, like weaker courts or lower ethical standards, that make such inflexibility unavoidable, and presents some arguments against the hypothesis.
The article concludes by noting that US and Italian corporate laws are far closer than they look: a 1948 friendship Treaty between the US and Italy requires the two States to reciprocally recognize companies and treat them as domestic ones. With international US law firms ever more present in the Italian market for corporate law services, the Delaware corporation may soon be a practicable alternative for Italian businesses wishing to incorporate or to go public. When this happens, the pressure for more flexibility in corporate law will arguably become strong in Italy as well.
Note: Downloadable document is in Italian.
Keywords: Corporate Law, Regulatory Competition, Mandatory Terms, Delaware, Corporate Law Reform
JEL Classification: G34
Suggested Citation: Suggested Citation