Учебный год 22-23 / Alpa_Italian_Private_Law_University_of_Texas

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same time, it is maintained that the analogy between physical and artificial persons holds good only under certain conditions, but not invariably. For example, artificial persons do not have children, or feelings, so it cannot claim damages for pain and suffering, it cannot revoke a gift on account of the ingratitude of the donor, nor as a donee, can it show ingratitude towards the donor, it cannot make a will, and so on. Artificial persons can on the other hand acquire, alienate and be the owner of property, as well as enter into contracts.

4.3. Artificial persons

4.3.1. Basic concepts

The elements that make up an artificial person are: a group of physical persons (the personal element), the basic constituent element of an association and present though not predominant in a foundation; a property base, that is, goods and/or assets assembled and identified in its charter; an objective, which must be lawful, possible and determined and may be fixed, and to the fulfilment of which the use of the property and the physical persons’ activities must be directed; and the formal element, constituted via recognition.

The existence of an artificial person must be entered in a public register, along with key documents. There is a register held by the court office in every provincial capital. The effect of registration is in most cases purely declarative: it serves merely as published notice to third parties. For capital-based companies, however, registration is a sine qua non of the company’s existence: we might refer to this as a constitutive company registration.

There is a debate over the distinction between artificial persons of a public nature and artificial persons of a private nature. This issue turns on the same problems of distinguishing between private and public law as have been signalled above.

4.3.2. Patrimonial autonomy

The privilege enjoyed by artificial persons is a limited exposure to risk. In other words, the property of the artificial person is kept separate from the personal property of its members. This separation is known as autonomy, and since it concerns property, it is referred to as patrimonial autonomy. Patrimonial autonomy is perfect in the case of bodies endowed with legal personality, that is, creditors of individual members have no recourse to any property owned by the artificial person, and conversely, creditors of the artificial person have no recourse to any property owned by individual members. In the case of other, unrecognised

bodies patrimonial autonomy is imperfect. Whereas creditors of individual members have no recourse to any property owned by the artificial person (short, that is, of obtaining the dissolution of the body and the distribution of its assets among the members), the converse does not apply, and creditors of the artificial person can seek satisfaction from the resources of individual members. Recognised associations and foundations enjoy perfect autonomy, as do capital-based and limited companies – the various types of company will be examined below under the heading of ‘commercial law’. Other bodies are restricted to imperfect autonomy.

The bond between legal personality and proprietorial autonomy is indissoluble. At the same moment as a body acquires the former, it also becomes privileged with the latter.

4.3.3. Capacity to have and to exercise rights

For artificial persons the capacity to have rights is inherent in the very concept of personality, with the limitation that, being a creation of the law and not existing in nature, they cannot enter into transactions of a family nature. This is not the same as stating, as was done above, that rules concerning injured honour, damages for pain and suffering, etc cannot be applied also to artificial persons.

As for the capacity to exercise rights, that is, to enter into valid legal transactions, artificial persons act through their organs. The will manifested by the organs (that is, by the directors, the chairman, or, if they are so authorised, by individual members) is imputed directly to the artificial person. The organs cannot express their own will, as they are mere instruments. Every action taken by an organ is referrable to the artificial person; even wrongful acts committed by the organ give rise to liability on the part of the artificial person.

4.3.4. Residence of an artificial person

According to Art 46 civil code: ‘Whenever the residence or domicile of a person is legally relevant, these in the case of an artificial person will be determined by where its principal office is established.’ And the legal consequences of where an artificial person has its principal office are many, in regard to formation of contracts, performance of obligations, the law dealing with registered offices and hence the nationality of the artificial person, in questions of jurisdiction in legal actions brought by and against the artificial person. Where these arise from a contractual dispute, there will generally be a term specifying that the competent court will be the one where the artificial person’s principal office is situated. This location may also effect the interpretations placed on contracts to which the artificial person is party (Art 1368(2) civil code).

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The artificial person, whether company, association or foundation or other body, is governed by statute, including the constitutive procedures (Art 25 of law no. 218 of 31 May 1995). Foreign artificial persons are assured a treatment equivalent to that of the corresponding Italian artificial person, provided there is reciprocity (Art 16(2) of the private international law provisions which precede the civil code.

Foreign companies with offices in Italy (of which there are many, particularly in industries such as oil and engineering) are subject to Italian law as regards company registration, publication of accounts and representation (Art 2506(1) civil code). Secondary offices are subject to Italian business law (Art 2507 civil code).

The reasons for this regime are various: a wish to protect third parties and creditors having relations with the company, a wish to subject the company to Italian tax laws and so on. To protect third parties and creditors, it is laid down that until the formalities outlined above have been duly completed, anyone who deals in the name of the company has unlimited liability in respect of the company’s obligations (Art 2508 civil code).

4.4. Recognised associations

4.4.1. Internal affairs

Legislation has resulted in few rules concerning associations, but many more concerning companies, which are a particular type of association covered in detail in Book V of the civil code. Whereas companies are intended to be profit-making enterprises, associations (whether recognised or not) are not-for-profit: their aims may be religious, historical, scientific, cultural in general, sporting, recreational and so on.

Associations are set up by a charter (Art 14 civil code). Foundations can also be set up by testamentary disposition. The difference between associations and foundations is that the most important feature of an association is the personal element (for example, a cultural association where many teachers work and the administration is concerned with the pupils), whereas in a foundation the property element is predominant (for example, funds dedicated to the cure of the sick and hospital care).

The document by which the association or foundation is created is known as the constituting instrument. The document which sets out the internal rules of the body is known as its charter. The constituting instrument and charter must include the name of the body, its objectives, details of its property, the address of its main office, and rules of a constitutional and administrative nature (Art 16 civil code). Where associations are concerned, they must also provide for rights and duties of members and conditions of membership. In the case of foundations,

they must include criteria and procedures for distribution of revenues to the beneficiaries.

As well as these essential elements, the constituting instrument and statute may also provide for contingencies such as the dissolution of the body, alienation of property and, in the case of foundations, rules covering their reorganisation or reconstruction. The constituting instrument and charter, and any modifications thereto, must be approved by the authority responsible for recognition of associations and foundations.

The administrators and the members’ meeting are the organs of an association.

The directors have executive powers. They must exercise them with diligence, inform the meeting of the body’s activities, and account for their operations according to the principles governing their mandate (Arts 18, 1710ff civil code). A director is not liable for any action in which he has not participated, or for any action in which he has participated but has not approved provided he has registered his dissent with a note of his reasons. The directors represent the intentions of the body to the outside world.

The directors will call a member’s meeting in various situations: to approve the budget; when they deem necessary (such as to approve a change in the charter or to expel a member); when a request is made, with reasons, by at least one-tenth of the members. In the last case, the court can call the meeting if the directors fail to do so (Art 20 civil code).

The members’ meeting approves the budget and instructs the administrators to take responsibility for carrying out various actions. It may also modify the constituting instrument and charter, and decide that the association be dissolved. Modifications to the constituting instrument and charter require a qualified majority – a quorum for this is three-quarters of the total membership, of whom a simple majority must vote in favour, whereas for ordinary decisions the quorum is one-half of the members, with again a simple majority of those present voting in favour. A higher majority, three-quarters of the total membership, is required to dissolve the association.

Decisions taken by the meeting can be annulled if they are contrary to law or to the constituting instrument or charter. That is to say, they can be rendered invalid on an application made to the court by the body’s organs (directors, chairman), or by a member or the public prosecutor (Art 23 civil code). Any effect of an annulled decision nonetheless remains valid for the benefit of a third person who has acquired from a dealing with the association, provided that person has dealt in good faith without knowledge of grounds on which the decision was voidable and has acted in reliance on that decision (Art 23(2) civil code).

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An association can be dissolved on grounds provided for by the constituting instrument and charter, or when its objectives have been attained or become impossible of attainment. Dissolution is declared by the relevant authority at the instance of any interested party, or of the members’ own motion.

Once the association has been dissolved, the administrators can no longer carry out actions on its behalf, otherwise they become personally (and jointly and severally) liable for actions carried out in breach of this rule (Art 29 civil code).

4.4.2. Judicial intervention

One of the most important problems in the regulation of recognised associations – the relevant rules also apply to associations without legal personality – is the protection of the individual member within the body.

Article 24 civil code only provides that a member cannot be expelled by decision of a member’s meeting except on very serious grounds. It does not indicate, among other things, whether there can be any derogation from the principle that expulsion can only be decided by a member’s meeting. The prevailing view is that the rule is generally subject to derogation and that the constituting instrument and charter may lay down which other organs of the association (a special committee or internal arbitrator, for example) are competent to make such a decision. Case law has also held that the rule on expulsion may be derogated from in the statute, but asserts also the power of the affected member to obtain review by the court.

4.5. Foundations

The civil code contains provisions common to associations and foundations. At the same time, there are rules specific to foundations. The founder can indeed revoke the founding document which has bound all or part of the allocated property to a particular objective only up until the moment that recognition is made. Thereafter the foundation has a separate existence as a body (corporate or charitable) independent of the founder with its own property and he can no longer act or purport to act in its place (Art 15 civil code).

In the Constitution there is no direct reference to foundations. However, freedom of association is guaranteed (Art 18 Constitution); individuals are protected in the ‘social groupings’ within which they fulfil themselves (Art 2 Constitution); culture is protected (Arts 9, 33, 34 Constitution). All these are considered by the currently dominant legal interpretation to be references on which a regime of foundations can be based, even if they do not amount to a very solid basis in that the rules

(particularly Arts 2 and 9 which the current doctrine has only now begun to pray in aid) are all of a rather general nature.

Although the civil code deals with foundations, it does not define them. In other words, legislators, lavish though they are with legal definitions in other contexts, have preferred in this case to rely on current terminology and allowed the meaning of foundation to be inferred from common usage without venturing into any theoretical attempt at a definition (a practice they have also adopted in the case of associations). Any definition of foundations is thus the work of case law and academic legal theory.

4.5.1. Endowing the foundation

The founding document is a unilateral act which can be made in the form of a public document intra vivos or by will (Art 14 civil code). In the first case the public document is required, in the latter, the will may be holograph or notarised.

When endowing the property on the foundation the founder makes a deed of settlement that relinquishes his title to the property entirely. Legal theory holds that, since the settlement will also contain directions as to how the property is to be used in pursuing the purposes for which they are needed, this function is essential to the document. From this it is concluded that any deed of settlement not containing such directions should be considered void, but the courts tend to save the settlement in these cases as the rules on organising the property can be effectively provided by the public administration.

4.5.2. Constituting a testamentary foundation

Legal theory distinguishes three ways in which a foundation can be created in a will. Two of these are considered valid, the third not properly applicable in the same way as the first two. There may be either a wish expressed by testamentary disposition or a disposition in favour of a foundation to be created, otherwise (and this is the unreconcilable possibility) conditions attached to hereditary entitlement or to a legacy. This last case, though conditions can be attached to a bequest, does not amount to a normal way of setting up a foundation.

The testator can also directly nominate the foundation to be constituted as his principal heir. In such a case the body, once it has been constituted, also inherits the testator’s debts.

On the other hand, foundations are rarely created by ‘public subscription’. Such situations normally give rise to the creation of a committee, though these can subsequently transform themselves into a foundation.

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4.5.3. Protection of beneficiaries

It is a matter of debate whether beneficiaries have any claim over a foundation or can exercise control over its activities. A judiciable claim can be made if the beneficiary is sufficiently identifiable as such, that is, conforms to a precise description in the statute of who a beneficiary can be. The charter may also provide that a beneficiary via representatives can exercise control over a foundation’s activities, but this a matter of choice for the founder, who may prefer not to confer any such right. It is submitted that when beneficiaries are defined as members of not precisely defined groups or generic categories, they may still be able to bring an action to reverse decisions that are in conflict with the statute or otherwise abusive.

4.6.Non-recognised associations. Political parties and trade unions in private law

Associations that do not have legal personality have not been recognised as autonomous entities with the privilege of proprietary autonomy. They are simple de facto (or unincorporated) associations. Such associations can have all kinds of purposes, whether cultural, artistic, recreational, etc. This form of body, being flexible enough to allow maximum freedom, is the choice, within private law relations, of political parties and trade unions.

Political parties and trade unions are major players in the political and economic life of the country. They contribute to the dynamic of public power – and in this guise they are subject to public law – with a structure typical of private law entities: the non-recognised association. The fact that political parties and trade unions have not requested recognition (and with it legal personality) shows that they wish to avoid coming under the controlling influence of the State provided for artificial persons. In legal terms, belonging to a non-recognised association is thus a guarantee of freedom and autonomy.

Parties and trade unions are set up then on the collective bases that are the foundations of these associations. Trade-union relations, as well as political relations, give rise to an internal organisation that is not created by the State, but they are also autonomous with regard to their statutes. They are a clear illustration of the theory of the pluralism of legal orders: they are in sum an instance of private autonomy.

The rules of private law govern non-recognised associations and hence parties and trade unions. This is the only form of State regulation that applies to associations, since Art 39 of the Constitution which provides for registered trade unions has not been put into effect. Since they are governed by the legal order of the State (more precisely, the civil code),

parties and trade unions are ‘legally accountable entities’ with a limited form of personality, that of imperfect patrimonial autonomy.

4.6.1. The regime governing association activities

The civil code devotes only three provisions to non-recognised associations (Arts 36–38), but they are subject insofar as possible to the rules governing recognised associations although. The controls in favour of creditors do not apply.

Internal rules and administration of non-recognised associations are subject to agreement among the members (Art 36 civil code).

To pursue their purposes, associations can benefit from a pool of assets that is not referred to as property but as a common fund. Individual members, so long as the association lasts, cannot request the division of these assets, nor claim to receive a share if they leave the association (resignation of membership, Art 37 civil code).

4.6.2. Committees

Committees are less important than associations and foundations. They are formed by groups of people with various ends in mind, and very often to raise money in support of those ends. Often they are formed to pursue political pressure campaigns such as safeguarding human rights and trying to secure a referendum on a particular issue. They may also be for specific and time-limited purposes such as organising a festival or exhibition (Art 39 civil code).

Committees are usually not recognised and have no legal personality. Certain principles apply to them, however, analogous to those applying to non-recognised associations, even if they take a form more similar to a foundation.

Organisers and those who take control of funds assume personal, joint and several liability for the safe-keeping of funds and ensuring they are put to their intended use (Art 40 civil code). If there is no legal personality, the members of the committee (unlike members of a non-recognised association) are also responsible. Whoever has subscribed the requested amount of money only has to pay it (Art 41 civil code).

When the funds raised are not sufficient for their purpose, or the purpose has been attained, or is no longer attainable, there are applicable rules for the disposal of remaining funds in default of any provisions made when the committee was set up (Art 42 civil code).

Committees, being autonomous and legally accountable entities, can possess rights and be liable to obligations, including having title to land registered in their name (Cassation decision no. 6032 of 1994).

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4.7. Voluntary and non-profit organisations

The variety implied by the world of associations, whether recognised or not; the demands placed on them in seeking to accomplish their purposes without engaging systematically in economic activity; the desirability of distinguishing these groups of people from organisations formed for profit: all these are reasons why the legislature has from time to time turned its attention to associations, conferring on them privileges and immunities, mainly of a fiscal nature, and promoting reform and modernisation of a more general nature in the provisions of the civil code. With hundreds of laws pertaining to groups or individual associations, the difficulty of appreciating the concrete problems of associations is matched by that of properly understanding the regulatory framework they operate within.

The simplification of the recognition procedure has been mentioned, as has the freedom to acquire land and now also inherit an estate or legacy.

Two recent laws complement the general regime covering the entire sector:

•the framework law on the voluntary sector (no. 266 of 11 August 1991);

•legislative decree no. 460 of 4 December 1997 on non-profit organisations.

4.7.1. Voluntary organisations

The law on voluntary activity takes note of the wish of young and old people, men and women, to give freely and regularly a significant part of their time and effort in the service of hospitals, refuges, orphanages, home, help for the disabled and in other situations where help is offered to persons in need. The law recognises ‘the value to society and the use of voluntary service as an expression of solidarity, pluralism and a civic sense, and wishes to promote its development, while safeguarding the autonomy of voluntary service in recognition of its contribution to social, civil and cultural goals’. These goals are set out by the State, regions and local bodies.

Voluntary activity is defined as activity characterised as follows:

•by its personal nature, offered spontaneously and freely;

•by its realisation within a voluntary organisation.

The activity cannot be paid, by the beneficiary or anyone else, and the nature of ‘voluntary’ activity is incompatible with any employee or self-employed status or other economic relationship with the organisation.

Voluntary organisations are defined as ‘freely constituted organisations’ set up to carry out the voluntary activity on the part of their members in a manner predominantly (though not necessarily exclusively) personal, voluntary and unpaid in nature. These organisations can assume the legal form they find most suitable, but the following must be provided for in their by-laws:

•the absence of any profit-making purpose and the unpaid nature of the members’ services;

•the democratic organisation of the body, elected positions and their unpaid character, requirements for membership and expulsion of members, and members’ rights and duties.

Since 1991 this type of organisation has been permitted to receive (over and above the fruits of traditional private and public fundraising) donations and testamentary bequests, as well as revenues from ‘ancillary commercial and productive activity’.

The law provides for voluntary associations to be entered on the appropriate register.

As may readily be noted, considerable exemptions apply with respect to the general law on associations:

•legislation requires a democratic structure (although the organisation is free, thanks to the autonomy of charter enjoyed by associations, to choose its own preferred form and structure);

•at the same time, this type of association is exempt from the rules against mortmain.

4.7.2. Socially beneficial non-profit organisations

Tax legislation has added a further piece to the jigsaw of rules governing non-profit bodies, by accompanying the introduction of immunities and privileges for purely non-profit activity with certain rules of private law.

An ONLUS (socially beneficial non-profit organisation) is defined by legislative decree as being one of the following:

•associations (whether recognised or not), committees or foundations;

•co-operative societies and other private bodies, with or without legal personality, whose charter (in the form of public documents or certified private deeds) provide exclusively for activities in the fields of social work or socio-medical assistance, welfare, education and training, amateur sport, protection and promotion of cultural heritage and the environment, of culture and art, civil rights and scientific research.